Indian Iron Ore Industry Output, Exports.

 Chhattisgarh joined ranks with Orissa to seek a ban on iron ore exports, a move that could further tighten supply of the steelmaking raw material and push prices, already at record peaks, even higher.

Shipments out of India, the world's No. 3 iron ore exporter, have already taken a beating from a ban on exports from Karnataka, which accounts for a quarter of the nation's annual exports, and companies have appealed against the move in the Supreme Court.

The table below shows iron ore output of these three states:

Production

(in 'OOO Tonnes)

States 2009/10* 2008/09

Karnataka 38,218 45,938

Orissa 73,569 74,130

Chhattisgarh 23,159 30,093

All India 215,000 215,437

* From April 2009 to Feb. 2010

Here are some key facts about the Indian iron ore industry:

PRODUCTION:

- India produced 226 million tonnes of iron ore in the year to March 2010 and exported 117.37 million tonnes. Much of these exports, 45 million tonnes in 2009/10, are from Goa.

- Exports fell for the sixth straight month in December 2010 as the Karnataka state ban on exports continued to bite. Exports were down 24.8 percent year on year and fell 17.02 percent in the April to December period.

- There are about 500 mines in the country, half of which are operational. These are held by about 80 companies.

- High-grade ores with 62-65 percent iron are produced mainly in the east and south. Low-grade ores with 50-60 percent iron are produced in the west and south.

- The largest mining firm is state-run NMDC, which produces about 29 million tonnes annually, mostly for local sales.

- The steel industry is a big domestic user of iron ore.

Many steel companies have captive mines.

EXPORTS:

- China is India's biggest buyer, with its proximity helping it secure ores with low freight costs.

- The largest exporter is Sesa Goa, a unit of London-listed Vedanta Resources.

- Other large producers and exporters are Essel Mining, Rungta Mines, V.M. Salgaocar, MSPL and Chowgule.

- Miners in Goa have lower costs as mines are located near the port, and so avoid road and rail charges.

CHALLENGES:

- Exporters work under the threat of hikes in export duty every time international demand rises as the government tries to cool local prices of iron ore to help steel firms.

- In April, India raised the export duty on iron ore lumps to 15 percent from 10 percent previously. Duty on iron ore fines stands at 5 percent.

- The cost of mining iron ore ranges from $8 to $16 per tonne. Rail transportation costs for exports rose 50 percent to 1,500 rupees ($32.9) per tonne on Jan. 27.

The industry has been lobbying for lower rail freight.

- Port infrastructure is poor and vessels can wait up to seven days to load cargo.

- Indian prices generally follow the global market, dominated by Australian and Brazilian miners, with China buying on a spot basis for its low-grade ore needs.

FUTURES

- The world's first iron ore futures debuted in India on Jan. 29, but volumes have been muted as participation of foreign players is not allowed .

* Source: Federation of Indian Mineral Industries and industry members.

Source : sify.com