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Ambarish Mukherjee

But wants export phaseout

New Delhi April 8 Major domestic steel producers have offered to lift 15 per cent of the current iron ore exports if the mining industry agrees to cap production at current levels and reduce exports by 15 per cent annually.

This counter-offer has come from the Indian Steel Alliance (ISA) in response to the mining industry's offer to stop exports if the domestic steel industry agrees to lift the entire ore production.

Domestic steel manufacturers and iron ore miners have been at loggerheads since the budget imposed a Rs 300 per tonne export duty on iron ore. While the steel industry wants exports of this natural resource to be phased out, the mining industry has put forward the view that there were no takers in the country for the entire lot of iron ore fines that they produce.

Seeking solution

Reacting to a statement from the Federation of Indian Mineral Industries (FIMI) about stopping exports if steel makers lift the ore, the President of ISA, Mr Moosa Raza, told Business Line that, "We want to work toward a win-win situation for everybody and request the mining industry to come forward with constructive solutions instead of putting forth impractical challenges."

According to the ISA, the steel industry had been requesting the Government to put a cap on the current level of exports at around 90 million tonnes per annum, and reduce exports by 15 per cent annually in tandem with the growth of the steel industry until exports reach zero level. "This is necessary to conserve the finite national resources," he said.

"The Indian steel industry is prepared to sit with the mining industry to find out ways and means of absorbing the 15 per cent surplus annually. The benchmark price could be the export price of NMDC. This would not only ensure that the current levels of production are maintained but also the current level of employment and nobody loses their jobs. We can always work out a formula to maintain the profitability of the mining industry," Mr Raza added.

However, FIMI is of the opinion that the growth of the industry should not be blocked by capping production at current levels.

Enough resources

According to the senior Vice-President of the FIMI, Mr Rahul Baldota, "India has enough iron ore resources to meet Indian steel industry's demand and also for exports. On the issue of whether exports should be restricted based on the future growth projections of the steel industry, it is too premature. Maybe after five years, a review could be undertaken on whether the steel industry's claims of capacity addition has really happened and also the position of iron ore reserves at that time. Accordingly, an export policy can be formulated," he added.

Mr Baldota said any cap on the growth of the mining industry was not acceptable.

Related Stories:
Steel industry for quantitative curbs on iron ore exports
`Rising iron ore exports could hit steel sector'
Steel industry welcomes export duty on iron ore

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