Iron ore shortage, if any, due to Odishas faulty policy: FIMI

New Delhi | Updated: Jun 12 2014, 19:49pm hrs
Refuting allegations by steel makers of a shortage in domestic iron ore supply, miners body FIMI has said a paucity in some regions is not because of the inability to produce more but due to a faulty policy of Odisha.

There has been surplus availability of ore since 2004-05, the Federation of Indian Mineral Industries (FIMI) said in a recent presentation to the commerce ministry. "It is significant that despite no new major mine having been opened in the last 20 years, production of iron ore has kept pace with the rising domestic and export demand. In other words, existing mines have the capacity to increase production as per demand," it said.

Domestic iron ore production has been on the wane and declined to about 129 million tonne in 2013-14 from 213.25 million tonne six years ago. "In case there is any shortage of iron ore in any part of the country, it is not because of incapacity of industry to produce more but because of faulty policy of Odisha government, which does not allow transport of more than 50% of the total production out of the state," FIMI said.

Odisha is the largest producer of iron ore in the country.

The miners' body said since the requirement of the steel industry in Odisha is not enough to consume even 50% of the ore produced in the state, stockpiles of the resource are lying at mine heads.

At the end of 2012-13, 69 million tonne of iron ore, mainly fines, were lying at mine heads.

Domestic steelmakers have often alleged a shortage in the key steel-making raw material and have sought a ban on iron ore exports on apprehensions India may run out of the mineral if widespread overseas shipments continue. About 1.6 tonne of iron ore is needed to produce one tonne of steel. "Crude steel production using iron ore is increasing at a snail's pace to warrant any apprehension about the shortage of iron ore in India," FIMI said.