Iron ore exports may plunge to 40 mt this fiscal: Fimi.

Iron ore export is likely to fall massively to around 40 million tonne (mt) in the current financial year due to the continuing ban on mining activities in many parts of the country coupled with higher export duty and rail freight charges, a top industry official said today.

Iron ore exported stood at 117 mt in FY10 and it dipped to around 98 mt in FY11. It dipped further to 60 mt in the last financial year.

"Iron ore exports from the country will not be more than 40 million tonne in the current financial year due to stalled mining operations in various parts of the country. Also, higher rail freight charges and export levy are likely to take its toll on exports," Federation of Indian Mineral Industries (Fimi) secretary general R K Sharma told PTI from New Delhi.

Outward shipment of the mineral has been constantly declining in the last three years due to halting of mining in all mineral-rich states following malpractices and illegal mining. While exports stood at 117 mt in FY10, it was only 98 mt in FY11, which again dipped to 60 mt last fiscal.

"Exports of iron ore have been witnessing constant decline in the last three years and we don't see the situation improving this fiscal either," Sharma said.

He also said states have not been taking decisions regarding new licences or renewing mining leases, which is the biggest obstacle in ramping up production, nor to normalise things in the industry.

"As per data available with us, there are around 45,000 mining lease applications that are pending with various states," he added.

On the recent recommendation of Karnataka to reopen eight mines in the state, Sharma said these mines are likely to be operational by mid-August.

Source : smartinvestor.business-standard.com