Scindia against curbs on iron ore exports.

NEW DELHI: The commerce and industry ministry has said that it does not favour any restrictions on exports of iron ore, arguing that production was higher than domestic consumption and failure to export the mineral could lead to environmental degradation and hazards in mining areas.

The statement made by minister of state for commerce and industry Jyotiraditya Scindia in reply to a Lok Sabha question will disappoint the domestic steel industry that has been lobbying for ‘preserving’ the natural resource for the industry’s future use by restricting its exports.

The export of iron ore has always been an issue but the pitch has been raised after Karnataka government decided last month to ban exports and subsequently extended it to taking it outside state borders.

India produced 226 million tonne of iron ore in 2009-10, more than half of which (117 million tonne) was exported.

Karnataka produced 46 million tonnes of iron ore last fiscal, the second highest among all estates, of which it exported about 20 million tonne.

Iron ore mining companies have already taken the state government to the courts over the abrupt ban, which industry says can result in a serious credibility issue for the government if other states were to follow.

In his reply, Mr Scindia justified exports saying that India was mainly shipping out iron ore fines, which is not used by domestic steel industry due to its limited sintering and pelletisation capacity.

During 2008-09, iron ore fines constituted about 87% of the total iron ore exports.

Any restrictions on its exports will not only harm the environment but would also affect economic activities in remove areas where handling of iron ore is the main employment generating activity, he added.

Steel minister Virbhadra Singh had earlier said the UPA government had an open mind about stronger deterrence measures to discourage exports of the mineral.

The government has already increased the export duty on iron ore has been revised to 10% on lumps and pellets and 5% on iron ore fines to discourage exports.

Most of India’s iron ore exports is headed to China, but the demand from the country is expected to slowdown as industrial growth moderates there after government measures to cool down prices.

Source : economictimes.indiatimes.com