The Federation of Indian Mineral Industries (FIMI), southern region has applauded the Supreme Court and the Karnataka state government for the recent policy amendments which will allow state iron ore miners to export surplus low-grade iron ore that are not feasible for domestic steel manufacturer’s consumption.
The recent imposition of a 50 percent export duty on low-grade iron ore has devastated the industry revival plan, especially in the state of Karnataka. The mining industry was supported by much-needed relief after almost a decade by the removal of trade restrictions on sales and export, the new export duty regime will, however, make the situation worse and may lead to further piling up of low-grade iron ore industry in the state.
After a struggle of 11 years, the Apex court’s order on May 5, 2022 lifted the restriction on the export of iron ore from Ballari, Chitradurga, and Tumakuru districts of Karnataka on the lines of the rest of the country and allowed direct sales as opposed to e-auctions only, has opened the doors for rejuvenation of the mining scenario in Karnataka, the imposition, yet again has once again majorly hit the industry across the country and brought it to a standstill including Karnataka.
The policy. now, will lead to massive forex loss and piling up of inventory of low-grade iron ore at mining sites across the country. There is already a huge stockpile of around 145.47 MT across the country, which has been increasing over the years due to no uptake of the ore by the domestic steel industry. The imposition of export duty will not benefit domestic steel manufacturers as almost all of them have captive mines, also domestic steel-making operations can’t utilise low-grade iron ore (below 58% Fe).
Khyum Ali, FIMI said “We strongly urge centre to re-look at the recent export duty imposition on iron ore and steel products which is counter-productive for the industry and country at large. We believe the imposition of export duty on low-grade iron ore will not at all support the domestic steel industry, but contrary will lead to the non-sustainable short-term selective mining of only high-grade ore which is against the concept of systematic and effective utilisation of mineral resources and hence export duty on low-grade iron ore should be abolished which will be a contributory step towards national interest.”