We Must Ban Exports of High Grade Iron Ore: Steel Secretary.

Spearheading the steel ministry’s efforts to conserve iron ore for steel companies, its Secretary P K Misra believes that the existing ore reserves are inadequate to sustain the plants. In an interview, he suggests a complete ban on exports of high-grade iron ore. Excerpts:

Domestic steel makers are concerned over the rising raw material insecurity. Will the ministry’s recommendation to hike duty on iron ore exports to 30 per cent allay these fears?

The steel ministry’s view is that iron ore reserves are limited and hence should be conserved. The mines ministry often argues that India has 25.25 billion tonnes of ore and there is no need to worry about scarcity. But of this estimated reserves, about 7 BT is not mineable in the Western Ghats. Of the remaining 18 BT, quite a bit of it is not extractable, which makes Indian steel industry uncompetitive in the long run. We should ban exports of iron ore having ferrous content 56 per cent and above. The mining industry should use and sell all their produce after beneficiating them. The steel industry will also have to bring in technology to ensure value addition of low grade ore failing which exports will continue.

The draft Mines and Minerals (Development & Regulation) Bill 2011suggests that reserving mineral-bearing areas for state-run units should be done away with. Do you agree? Or does the ministry want a greater say in allocation of iron ore mines?

One issue that needs to be addressed in the MMDR Bill is continued reservation of mineral-bearing areas for the PSUs. Doing away with it would be undesirable. I think that the state-run units should be given at least 10 years more as market mechanisms have not yet fully developed in India.

I am not sure how doing away with the reservation system would help ensuring a level-playing field.

Also, the royalty system was our concern as it needed more clarity, which has been subsequently done.

The ministry is not in favour of having any say in allocation of mines as we believe that the process of auctioning in the MMDR Bill will induce some transparency in allocation.

There is a view that the steel ministry is not concerned about greenfield plants not coming up and is happy with brownfield expansion. What is the level of capacity addition you see in the near future?

It is true to a certain extent. The general thrust among the steel producers has been toward brownfield expansions. Through the brownfield route, we are all set to add at least 10 MT of fresh capacity this fiscal, which would take our total production capacity to 88 MT. What more, we expect to be a steel exporting nation by 2012-13 as we would have enough capacity to sell abroad.

Source : indianexpress.com