BS reported that India’s iron ore exports are likely to hit a new low during the 2012-13 financial year and settle at about 40 million tonnes a drop of close to 35% over the current year’s estimates.
Exports are estimated to decline to about 60 million tonnes in 2011-12 from 100 million tonnes in 2010-11, a fall of 40%
Mr Basant Poddar chairman of Federation of Indian Mineral Industries, South said that “The decline in exports is mainly due to rise in export duty to 30% and railway freight, which is highly discriminatory for exports compared to domestic freight rates. Before 2003, nobody bought low grade ore from India. In the future, too, apart from China, nobody will buy low grade ore.”
He said that for example, the railways charge INR 600 a tonne as freight for movement of ore for domestic consumption and INR 2,800 a tonne for ore meant for exports. This has discouraged miners from exporting.
Another major factor for low exports is the ban in Karnataka. In addition, the stoppage of mining in Karnataka, following the Supreme Court order in July, added to a decline in exports during the current financial year.
He said that Orissa’s exports have come down mainly due to differential railway freight rates. Goa’s exports have also declined substantially this year and may settle at about 34 million tonne, down from 55 million tonne last year.
Karnataka’s share in national exports was about 35 million tonne till 2009-10. Since August 2010, there have been no exports from the state. Next year, India’s exports will touch the lowest level in the past decade.
Mr Poddar said that “Demand from China is steady, but they are also getting ore from Australia and Brazil also. Australia and Brazil are together adding about 500 million tonne of exportable capacity in the next five years. Whereas, in India, we are closing our mines and losing our status as the third-largest exporter of ore in the world. We may drop to sixth or seventh position.”
He added that “If the Supreme Court accepts the Central Empowered Committee’s recommendation and puts a cap on the production of iron ore at 30 million tonne in Karnataka, investments in the steel sector will not only be affected, but it would also lead to loss of market share for India in the export market.”
Mr Poddar noted that the loss means future investments to the tune of about USD 5 to USD 10 billion in the ports and railway sectors taken up on a public private partnership basis will be in jeopardy.
(Sourced from BS)
