Considering India’s future iron ore requirement to feed a likely steel capacity of 600-700 MTPA by 2030, a committee is being set up by government think-tank NITI Aayog with the mandate of assessing the need to shift focus on exports of value-added products of the raw material as part of the ‘Make in India’ programme.

The proposed committee is not intended at discouraging exports of iron ore per se, but at encouraging exports of value-added products of iron ore, steel secretary Aruna Sundararajan, who is slated to head the panel, told FE.

Sundararajan said NITI Aayog found the need to asses India’s iron ore requirement vis-a-vis its future demand after a recent study by the National Council of Applied Economic Research (NCAER) said the steel-making capacity of the country could go up over six-fold to 600-700 MTPA by 2030, requiring over 1,000 MT of the raw material in a year.

It generally requires 1.6 tonnes of iron ore to produce one tonne of steel.

According to the Indian Bureau of Mines (IBM), India has 31,323 MT of iron ore reserves, as on April 1, 2013.

“India has so much iron ore, but those should be converted into value-added products, as part of the ‘Make in India’ programme rather than exporting it as iron ore,” Sundararajan said, spelling out the rationale behind NITI Aayog for setting up of the committee.

The panel, which will also look at the current disability factors of the steel industry, will have members from the ministry of coal, state-run miner NMDC and representatives from mineral-rich states such as Odisha, Jharkhand, Chhattisgarh and Karnataka, Sundararajan said.

While steel industry sources expressed doubts over the NCAER estimate, they said there was a need to preserve the raw material in the country for future use. Miners, however, said the government’s flip-flop on iron ore would take the intended value-addition nowhere.

Aimed at encouraging value-addition, the UPA government had gradually raised export duty for both lumps and fines to 30% from nil. The current dispensation (NDA) brought it down to 10% for iron ore containing less than 58% iron as the shipments of the raw material fell sharply.

While this has raised the prospects of higher exports, it has not gone down well with the prospective investors to invest in creating facilities for value-addition.