KOLKATA (miningweekly.com) - India’s Union Cabinet of Ministers were poised to take a call on canalising all high-grade iron-ore exports through a single government owned agency, at a meeting scheduled for next month.
The proposal to canalise the export of high grade iron-ore was in response to a recommendation of a complete ban on exports made by the Justice M B Shah Commission of Enquiry into widespread illegal mining across the country, particularly in the iron-ore reserves belt in provinces of Orissa, Karnataka, Goa, Chattisgarh and Jharkhand.
The deliberation of the Cabinet of Ministers would be based on a note prepared by the Commerce Ministry, which suggested that all exports of iron-ore above grade of 55% iron should be routed through the government-owned Mineral and Metal Trading Corporation, with the latter entitled to 1% commission on value of each consignment.
India’s current iron-ore production was pegged at 220-million tons a year, of which 100-million tons were exported. Of the total exports, the west coast province of Goa accounted for 54-million tosn of exports during 2010/11 with 40-million tons comprising iron-ore fines with an iron content of 55% or less.
In wake of the M B Shah Commission’ enquiry into illegal mining and rulings of the Supreme Court, a complete ban on mining has been imposed in Goa and Karnataka. The courts have made an exception only for the government-owned NMDC Limited, which has been permitted to operate two mines in Karnataka.
However, the canalisation proposal has already split the Indian steel industry into a divide, with miners opposing the move while steel producers, particularly those without captive mines favoring it on the grounds that canalisation would make more volume of resource available to the domestic industry.
According to the Federation of Indian Mineral Industries representing mine owners, canalisation would fail to check illegal mining and on the contrary would result in new irregularities like under-invoicing and false declaration of grades of ore.
Steel producers such as JSW Steel, which does not have captive source of ore, have favored canalisation arguing that it would conserve ore, prevent exports without value addition and release greater volumes for domestic steel production.
JSW operates a steel plant in Karnataka which was currently adversely hit by the ban on mining in the province. The company’s three-million tons a year steel making project in West Bengal province too has been stalled by roadblocks to establishing iron ore supply linkages.
Source : miningweekly.com