Home ECONOMY Surging iron ore export threat to domestic steel sector, say experts

Surging iron ore export threat to domestic steel sector, say experts


Reported by Sandeep Pattnaik

Bhubaneswar, Jan 17 :

Rising trends in export of iron ore, the key raw material for production of finished steel, poses a big threat for the growth of steel industries in India, say industry observers.

According to them though extraction of iron ore has increased steadily since 2001, the export of the commodity has also been increasing simultaneously.

pic credit : au.ibtimes.com
pic credit : au.ibtimes.com

Available data as per IBM(Indian Bureau of Mines) Mineral yearbooks show, while iron ore production in the country was 80.8 MT in 2000-01, it  increased to 219 MT in 2008-09, recording around 173% growth in output. The sudden jump in the output level  was chiefly due to export commitment to the Far East countries.

In the year 2005-06, India’s iron ore production had touched 165 MT  making the country the 4th rank biggest iron ore producing country after Australia, Brazil and China.

IBM data shows, the ratio of export to production during the same period witnessed an uptrend from 47.3% in 2000-01 to 58.46% in 2008-09 and crossed the 50% limit. Thanks to the export commitment, this resulted in low output of steel in the country, .

In the year 2000, world production of iron ore was  1060 million tons (MT) and production of crude steel stood at 847 million tons. That year India produced a mere 27 MT of crude steel which is a little above 3% of the total steel production globally. The poor output was due to the fact that a major chunk of extracted iron ore had found its way to China, according to experts.

“Export of iron ore to China is almost 90% of the total export from India. The balance amount of iron ore is usually shipped to Japan and South Korea,” a professional working in the geosciences sector revealed.

India needs to augment its exploration activities which can help increase the volume of iron ore available , he suggested.

“However, our iron ore resources are not infinite and we should try through all possible technological and R&D inputs, to put more and more iron ore fines to use, leaving practically no wastes, even partly utilizing the slimes of washing plants, after due processing,” he said to OST.

“At the same time there is a visible threat to the Indian iron and steel industry as the trend of export since 2000 is picking up very fast. So there should be some constraints on export of this vital commodity by the Government,” he added.

It is to be noted that, in Odisha the distribution of iron ore deposits are largely in and around the Singhbhum-Keonjhar-Bonai sector commonly referred to as horse-shoe belt. Ores from this belt meets the major requirements of iron and steel industry of India, besides contributing a substantial quantity of ore for export to Far East and other countries.