The China Iron and Steel Association rejected an Indian report that accused China of gobbling up India iron ore reserves and demanded New Delhi ban exports of Indian ore to China.
Business insiders and analysts said the proposed ban of iron ore exports is unrealistic for India and would barely affect China steel industry given the oversupply of iron ore in the global market.
A report by the Justice MB Shah Committee which looked into illegal iron ore mining in India resource rich state of Goa said "China had strategically stopped short of tapping its deposits of 200 billion tons and the central government should "consider banning exports of Indian ore."
The report said "Planning and conservation of iron ore for at least 50 years is required for Goa so that future generations may not be required to import steel from China."
Ms Qu Xiuli a deputy secretary general of the CISA told the Global Times that China's crude iron ore output has been rising by 20% annually. She said that "The CISA encourages exploitation of domestic mines, and aims to reduce imports to bring the price of iron ore under control."
She also said that China's imports of iron ore from India have been declining.
According to LGMT Research, a market consulting firm for the steel industry, Indian iron ore took up around 11% of China's overall imports of iron ore in 2011 a decline from 15.6% in 2010.
Mr Wang Guoqing director of LGMT Research told the Global Times that the decline was a result of hiked export duties imposed by India in recent years. He said that "It's not the right time for India to control its exports to China, because there is an oversupply of iron ore in the global market. Brazil's Vale, Australia BHP Billiton, Rio Tinto and FMG have all been expanding their production capacity."
The analyst also indicated that an export ban from India would barely hurt China's steel industry, as the country has made some progress in diversifying its iron ore sources by cooperating with ASEAN countries, Russia and Mongolia.
Mr Fu Xiaoqiang a researcher with the China Institutes of Contemporary International Relations told the Global Times that the proposed export ban reflects the mentality of a small group of nationalists in India, who regarded it as humiliating that bulk commodities take up a large part of Indi0061 exports to China.
He said that they should recognize that iron ore exports to China have helped the development of the local mining industry, job creation and also narrowed the trade imbalance between the two sides.
Source - The Hindu Business Line
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