Huge gap between ‘demand’ and supply’ of iron ore: Steel Minister Dharmendra Pradhan

The Centre is looking to address the issue of shortage of iron ore which is impacting the iron and steel industry.

It is to be noted that iron ore supply, particularly in Eastern India has been affected as the mines which transferred hands, have not reached their full production levels.

Acknowledging that there is a “gap” between demand and supply of iron ore, Dharmendra Pradhan, Minister of Steel, Petroleum and Natural Gas, said that the government is in talks with concerned stakeholders to address the issue.

Temporary ban on exports

Responding to a specific query on the possibility of imposing a short term ban on iron ore exports, he said, it could be an option which could be explored.

“In 2019-20, the overall mining capacity of iron ore was 250 million tonne (mt) while the domestic consumption was only around 180 mt so the surplus was exported. But at this juncture there is a gap and we are talking to concerned stakeholders,” Pradhan said addressing the 119th annual general meeting of the Merchants’ Chamber of Commerce and Industry virtually on Thursday.

The Indian steel sector has been facing an acute shortage of iron ore, which is a key raw material for making steel, due to lease ownership changes as well as spurt in exports.

According to industry estimates, while production of iron ore production during the period April to July 2020 witnessed a de-growth of around 50 per cent as compared to last year, exports registered a sharp rise of around 63 per cent during the same period.

Expressing concern at the shortage of iron ore, Pradhan said that State governments could come up with a ‘policy mechanism’ for improving the supplies and production of iron ore.

“I am concerned at the non availability of iron ore. If state governments can initiate some process in the form of a policy framework then we can avoid disruption to the supply chain. It will be a win-win for the industry, state government as well as the central government,” he said.