High-grade ore exports must end in 5 yrs: Paswan

New Delhi, Aug 30 | Updated: Aug 31 2006, 05:30am hrs
Chemicals and fertilisers minister Ram Vilas Paswan has written to commerce minister Kamal Nath and mines minister Sisram Ola proposing to do away with export of high-grade iron ore (with Fe content of 65% and more) in the next five years.

Stating that export of iron ore more than doubled in the last five years, Paswan told Kamal Nath and Ola, The most pressing need is to arrest the trend in export of quality iron ore and stop it in the course of the next 5 years, so that this precious natural resource is domestically value-added.

Kamal Nath and Ola share the view that ore should be exported without any major curbs. Currently, there is a ceiling on high-grade ore exports and it is mostly canalised through the public sector Minerals and Metals Trading Corporation.

Indias per capita reserves of iron ore was 10 tonne as opposed to Brazils 120 tonne and Australias 900 tonne--both major exporters.

Rather than emulating these countries, India should draw a parallel with major steel producing countries like China, the US and Russia, which preferred to use ore domestically, he said. China is rich in coking coal, but does not export it, Paswan noted.

Ironing out creases

Indias per capita iron ore is 10 tonne, while that of Brazil is 120 tonne and Australia 900 tonne
In 2005-06, 54% of the ore (94 million tonne) produced in the country was exported
NSP envisages increase of iron ore to 110 MT by 2020 from the current 35 MT

In 2005-06, 90 million tonne (MT) of ore or 54% of ore produced in the country was exported. About 70% of the exports were of high or medium-grade ore. If exports continued to grow at the current pace, domestic reserves would be exhausted in the next 25 years, Paswan said.

He said ore reserves were the main attraction of foreign steel-makers like Posco and Arcelor Mittal as they proposed to set up steel plants in India and the reserves needed to be preserved for domestic use.

The National Steel Policy (NSP), Paswan said, targeted to up domestic steel production to 110 MT by 2020 (from 35 MT now), with an investment of Rs 2,30,000 crore.

The cost advantage of the new units would hinge, to a large extent, on the availability of indigenous ore. But exports had reached 90 MT as early as 05-06, Paswan said.

Indias known ore reserves are estimated at 22.1 billion tonne. Of this, 11 billion tonne is haemetite ore in the northeast belt comprising Orissa, Jharkhand and Chattisgarh, which the global steel majors were eyeing.

And high-grade ore is just 923 MT or less than 10%. Lumps are mostly in demand in India now, while exports are mainly of fines.

Paswan said building up palletisation and sintering facilities would help augment domestic use of fines.

Magnetite concentrates were not available for extraction because of a Supreme Court ban.