Indian panel to reconcile iron-ore exports conflict

KOLKATA (miningweekly.com) - India will establish a panel of experts to align the apparent contradictions contained within the government’s policy for iron-ore export to deliver greater value addition within the country.

The panel would be set up within the national policy think tank National Institute for Transformation of India, or NITI Aayog, with the mandate not to discourage iron-ore exports from India, but to lay out the roadmap for greater value addition and raw material security as flagged in the government’s “Make in India” progamme, a Mines Ministry official said.

He said that Indian exports of iron-ore apparently militated against the obvious necessity of conserving raw material for domestic consumption, value addition and exports of value-added products, instead of raw material, allowing for a strong manufacturing value chain within the country and higher export realisations compared to raw material exports.

The panel would reconcile the differences between standalone iron-ore miners and domestic steel mills without captive iron-ore mines, which invariably took diametrically opposite stances on various policies pertaining to the mining industry.

For example, the domestic steel industry bemoaned a shortage of raw materials and rising import dependency while standalone iron-ore miners claimed that Indian exports of the raw material were predominantly lower-grade fines which the domestic steel mills’ blast furnaces were not equipped to accept as feedstock, the official added.

To take these issues into consideration, the panel would also include representatives from iron-ore bearing province such as Jharkhand, Chhattisgarh, Odisha and Karnataka, national iron-ore miner NMDC Limited, and officials from all large steel mills in the country.

'To export or not to export' has been a government policy dilemma over the years, reflecting in the changing stance on tariffs of successive governments based on the conflicting pressures of the divergent interests of various industry stakeholders, the official said, pointing out that the previous government had raised the export tax on both lumps and fines of all grades to 30% while the present government reduced it to 10% in the case of fines with an iron content 58% or lower.

The panel was expected to ensure projected domestic steelmaking capacity at the level of 600-million tonnes a year by 2030 was not hamstrung for want of domestic raw material, while at the same time maintaining production from standalone iron-ore mines which were dependent on export shipments for their economic viability, the official added.