The current global price of Iron Ore at around $120/t cfr China is in tandem with the falling trend of this critical input and is projected to go down further by another $10-15/t in the coming weeks, depending on how the Chinese deal with the huge inventories lying at ports (exceeding 115-120 MT) and their policy measures to cushion the impact of credit dues from the small and medium steel manufacturing units.

India, plagued with the menace of illegal mining, faces a different scene. Of the five major iron ore-producing states, Karnataka, under the SC order, has resumed operations in 25 mines (under category A & B) to produce around 22-24 million tonnes in FY15 against the court cap of 30 million tonnes and the estimated demand of 36-38 million tonnes in the state.

Goa has to cap production at 20 million tonnes under the SC order. However, the court ruling on the cancellation of all mining leases under deemed extension after 2007 and immediate stoppage of mining operation from the mines located within 1 km of the National Parks and Wildlife Sanctuaries has put a big question mark on the actual availability as reportedly only one lease, as per this stipulation, is currently valid and a good number of miners had not even bothered to apply for extension after 2007.

Orissa has produced around 50 million tonnes in FY14.

It has already reserved 50% of the availability for value addition within the state and this has put a premium on the freight cost for transporting the balance volume for consumption by steel and sponge iron units outside the state. The SC ruling is awaited shortly for Orissa.

Jharkhand and Chhattisgarh produce an annual average of 20 and 30 million tonnes, respectively and there are some unresolved issues involving big iron ore sources such as Chiria, Rajarah in these states also.

All these pose a challenge to the new government, its commitment to the federal structure, regional development and

balancing the forest and environment regulations with the entrepreneurial aspirations in the interest of employment and

income generation of the backward locations.

Of the total 28.5 billion tonnes of iron ore resources (mostly hematite) in India, around 85% is of high and medium grades (> 61% Fe).

The balance 15% is either not explored or mixed with medium grades. The accumulation of fines at plant sites and huge reserves of slimes in the tailing ponds are creating environmental problems due to prolonged storage.

The onus lie with the myopic strategies of the indigenous steel industry of neglecting the exploration and use of low-grade ores and fines by adopting beneficiation and agglomeration facilities for sintering and pelletisation, little innovation in waste disposal technologies.

These technologies (including upgrading the high alumina, low silica iron ore) requiring minimum investment were never taken up with the government for incentivising for common beneficiation facilities to be made available to the industry on rental basis.

The NMDC-led beneficiation and agglomeration facilities (with technology transfer from the conglomerates, if necessary) for use by the steel plants and sponge iron units could have made a paradigm shift in the iron ore availability in the country and put a logical end to the perennial debate between export and indigenous consumption of this precious raw material. The time is ripe for the new government for this decisive step.

The author is DG, Institute of Steel Growth and Development. The views expressed are personal