India: From being iron ore exporter to importer?

It must be remembered that stoppage of mining work for iron ore, due to allegations of illegality, not only prevented exports but hurt the domestic production of steel mills too

The Ministry of Steel, in a mid-year plan review has announced that, in order to reach a production target of 300 million tonnes of steel, by 2025, it may be necessary to import iron ore. What a fall, considering that only a couple of years ago, in 2011-12 period, our export of iron ore fetched a good $7 billion, which, due to the discovery of illegal mining operation had to be stopped and mining work ceased in Goa and Karnataka.


Only recently, those of the mines that were above board, categorised as class "A" were allowed to commence work; likewise, class "B" mines, which had minor offences also began to work by making the required corrections, while those in "C" category were totally banned from work.


As a result, during the period January to September, this year, only 8 million tonnes of iron ore could be exported, and being low grade fetched about $ 75 per tonne for shipments to China. It must be remembered that stoppage of mining work, due to allegations of illegality not only prevented exports but hurt the domestic production of steel mills too.


Work in some of the Karnataka mines have started, while Goa's 90 mines are totally untouched since the ban was imposed. Media reports carried the details of 11.48 million tonnes of mined iron ore being ready for despatch, which the Supreme Court has kindly ordered to be e-auctioned by the Government of Goa.


In order to expedite the decision on the situation in Goa, where mining has totally come to a stand-still, the Supreme Court has approved a Six-Member Expert Committee to study and make a recommendation by 15th February next year. While one member each will be nominated by the Government of Goa and the MOEF, four others have been approved for this purpose, viz, CR Babu (Ecologist), SC Dhiman ( Geologist), BK Mishra (Mineralogist) and S Parameshwarappa. Their main job is to recommend the annual cap on volume of iron ore that can be extracted from Goa.


In the meantime, it is hoped, that the Supreme Court may kindly allow those of the category A mine owners to recommence their operation, so that, at least domestic steel mills do not suffer for lack of raw materials.


In the case of Sesa Sterlite, holding category A clearance, to start mining operations in Karnataka, with all the required other clearances are unable to make the next move simply because of the flimsy grounds raised by Forest Department there.


NMDC (National Mineral Development Corporation) are the largest iron producers in the country whose estimated reserves are about 1300 million tonnes. Their high grade ore is in demand and 90% of the production is consumed within the country; only ten percent is exported. It appears they have plans to increase their production in the near future.


There is no harm in importing raw materials when necessary, particularly when these are in short supply, but when these are available in the country and not being able to use them because of inadequate controls, which are of our own making, it reflects on our inefficiency.


We are fed up with each of the departments exercising their "authority" to show that they are the boss and that they can create hurdles in progress as and when they please.


This sort of attitude must stop if the nation has to make any progress.


(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)

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