Iron ore exports plunge 68% on mining ban

Written by Press Trust of India | New Delhi | Updated: Feb 28 2013, 09:04am hrs
India's iron ore exports declined by a staggering 68.27% during the April-January period of the ongoing fiscal to 163.47 lakh tonne, industry body FIMI said Wednesday.

The country had exported 515.19 lakh tonne of iron ore in the corresponding period of the last financial year.

There was not a single month during the first 10 months of the fiscal when exports were in the positive terrain. In January 2013, exports plummeted by 85.54% to 7.96 lakh tonne compared to 55.04 lakh tonne a year ago.

The biggest fall in exports, however, took place in October 2012 when it fell by a whopping 95.14% to 2.21 lakh tonne from 45.49 lakh tonne in the year-ago period.

The narrowest fall was recorded in April at 35.84% to 52.68 lakh tonne from 82.11 lakh tonne a year ago.

The iron ore sector has been struggling to cope with several issues including illegal mining and ban on mining in Karnataka and Goa the two major iron ore-producing states.

A ban on mining in Karnataka was imposed about one-and-a-half years back and mining in Goa was banned in October lastyear.

India mostly exports fines, a variety of iron ore having lower iron content. This variety constituted 92% of the total iron ore exports in 2011-12. India had exported 600 lakh tonne of iron ore during the year.

Exports of iron ore are on the wane following 1,200 lakh tonne recorded in 2009-10 due to a variety of reasons that include higher export duty, which currently stands at 30%.

The government had in last year's Budget reduced the customs duty on plant and machinery for setting up or substantial expansion of iron ore pellet plants or iron ore beneficiation plants from 7.5% to 2.5% to preserve iron ore and discourage exports.

Barring a private sector steel firm, other domestic steel-makers do not use fines for iron making though fines inevitably come out at the time of mining lumps.