Kudremukh Iron Ore Company Ltd. (KIOCL) is planning to resume with its exports of iron pellets from India by the end of 2013.
KIOCL earlier used to export its products but had to stop in September 2011 because of the scarcity of iron ore and freight charges of the Indian Railways.
Malay Chatterjee, chairman and managing director, KIOCL, said, “We are currently sourcing iron ore from NMDC’s Kirandul and Bacheli mines in Chhattisgarh at Rs 4,500/MT. The railways have been charging distance-based charges over and above normal freight on iron ore transported for manufacture of pellets meant for export. We are working out how we can open up exports. Once, we sort out this issue with the railways, we will restart exports.”
KIOCL has filed a petition in the state high court against the railways policies. They are forced to pay Rs 1,600/MT due to the differential freight rate charged by the railways. At present, they are selling their iron ore pellets in the domestic market in spite of continuous demand for their quality pellet in the global market. Their Direct Reduced Grade pellet is in huge demand in the market, especially from the Chinese market. It could easily be sold at US$ 25/MT which is higher than the price of blast furnace pellet in the global market. As soon as the railways remove the restrictions the company will commence with the exports.
A company official said, “Presently, the pellets are priced at US$135/MT in the international market and it would not be beneficial for us to export after paying distance-based tariff to railways. We have to wait for the prices to go up or wait for the railways to change their policy.”
Thus, with the freight charges reduction by the Indian Railways, KIOCL will again export its iron pellets in the market worldwide.