`Ban on iron ore exports will only harm domestic market'

`Ban on iron ore exports will only harm domestic market'

Special Correspondent

BANGALORE: A prominent mine owners body in Karnataka has opposed the demand made by steel producers to ban iron ore exports from the country stating that such a decision would only harm the domestic market.

Scarcity reports denied

The Bellary-Hospet Iron Ore Mine Owners Association (BHIMOSA) has termed the allegations that the iron ore resources in the country would last for only another 20-30 years as "misleading." "This alleged scarcity of iron ore in the domestic market, if the commodity was exported, have been projected by a small section of the secondary steel producers in the country and is completely different from ground reality," says Mohamad Iqbal Hothur, Secretary, BHIMOSA.

" This effort to restrict iron ore exports seems to be designed so that the Indian iron ore industry does not have an outlet or market and is forced to make iron ore available in the domestic market at depressed prices," Mr. Hothur stated.

India's iron ore reserves of 25 billion tonnes will last for more than 150 years at the present rate of domestic consumption. Besides, the expansion in mining will lead to more deposits being discovered and hitherto unusable grades of iron ore (for instance ore with 50 per cent Fe content) can now be used in steel making with advancement in steel-making technology. Further, all integrated steel plants have their captive mines and draw their supplies from them and do not depend on stand-alone mines.

" Hence, there is no question of a situation where there is a shortage of raw materials due to iron ore exports. The iron ore that is now being exported is the surplus for which there is no demand in the domestic market," he said.

India produced 165 million tonnes of iron ore in 2005-06 out of which 89 million tonnes were exported. Out of this 89 million tonnes of exports, 80 per cent were iron ore fines that do not have a demand in the domestic market since most of the steel plants are lump-based and do not use fines.

Moreover, out of the total production of iron ore in the country, 75 to 80 per cent are either natural fines or become fines due to conversion of lumps.