ICRIER study sees increase in iron ore resources in India

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Kolkata, Mar 5: India's iron ore resources can increase significantly from the current estimated level and there is no urgency to rush into any conservationist policy as regards to ore exports, according to a study carried out by ICRIER.

The study says that the size of mineral resources is a dynamic concept and depends on exploratory efforts, which have not been enough in India for lack of investments.

India's iron ore resources have increased by an average of 307 million tonne per year during 1980-2005 despite continuous extraction for domestic consumption and export.

Currently, ore resources are estimated at a little over 25 billion tonne, considering a depth of 50-60 meters. Deposits can be found and economically mined even up to 200 meters and more, according to the study.

The study points out that though there are concerns over reserves in view of the proposed capacity additions, a significant share of steel gets recycled. With increased use of scrap, demand for iron ore will be less.

India 's iron ore production in 2006-07 was around 181 million tonne, which was in excess of the consumption level. India exported about 93 million tonne during that fiscal, which is expected to come down to about 88 million tonne in the current fiscal.

Nearly 80% of exported ores are fines, because those are not adequately used in India. India's competitiveness in the Chinese market has already started falling, the study points out.

The study says that in the current scenario, export restrictions will make it difficult to take care of excess fines. Restrictions on trade in iron ore will also restrict the economies of scale to Indian mining companies and they may remain inefficient in global comparison forever.