Iron ore export ceiling may see small cut

Move aimed at helping local firms without captive mines.

The government may cut down on iron ore exports by 2-3 million tonne in a bid to help local companies without captive mines, said steel minister Ram Vilas Paswan.

"Various local companies such as Jindal Steel, Ispat and Essar Steel do not have captive mines. Also, we have to help meet ore requirements of the Rashtriya Ispat Nigam Ltd (RINL). Thus, we are working on cutting down iron ore exports," said Paswan on the sidelines of a steel seminar organised by the Confederation of Indian Industry, Indian Steel Alliance and Hewlett-Packard.

The ministry had taken up the issue of capping export of high-grade iron ore with the Cabinet. "The Cabinet has asked the steel and commerce ministeries to look into the matter and work on a cap," said Paswan.

As per the ministry's proposal, ore exports by state-owned National Mineral Development Corporation (NMDC) may be moved to a lower band of permissible exports.

The steel ministry had earlier fixed the NDMC's exports in the band of 1.7-6.5 million tonne. "We are now considering the lower band to 1.5 million tonne from the current 1.7 million tonne," the minister said.

While the 2-3 million tonne cut in exports would be minuscule compared with the 78 million tonne exported in the last financial year, it is significant as it is a cut in high grade ore with over 67 per cent iron content. Of the total ore exports, the high iron content ore (with over 64 per cent iron) has 25 per cent share.

Also, the government is considering developing a policy for the iron ore sector, in view of short supply of high-quality ore in the country, said Paswan.

"We need to understand that high quality ore supply must be restricted in view of long-term domestic requirements," he added.

India exported 78 million tonne of iron ore in the last financial year and the domestic consumption was about 48 million tonne.

The minister also called for a bigger role of information technology in the industry. "India has emerged as a major player in providing IT solutions to businesses around the world. The steel sector should also benefit as it will not only increase output and transparency but also cut costs," he added.

Paswan mentioned that SAIL is working on implementing ERP packages at its Bhilai and Bokaro units.

IT, the minister said, would help India achieve its target of producing 110 million tonne steel by the year 2020 compared with last financial year's 38 million tonne.