Iron ore exports likely to decline, as the raw material will be consumed mostly by the local companies of the state
Odisha state’s Iron ore production is likely to grow up by 5% to 65 MnT by the end of FY 14 and its exports will therefore reduce. The local companies prefer using the low grade fines produced in the Odisha mines. So the state’s iron ore productions are consumed by the local industries itself. With the growth in production, the demand too will grow, thus resulting in less export of the material.
According to Mihir Kumar Senapati, Deputy Director of the Directorate of Mines, iron ore export from Odisha is likely to fall down and become 3 MnT by the end of FY 14 from the previous year’s exports, which was about 5 MnT.
Odisha’s total iron ore output is around one third of India’s total output.
Exports is expected to depreciate because the local companies now prefer to use lower grade iron ore fines than the high grade material which is much costlier. The low grade iron fines which was earlier exported is now being consumed by the local pellet makers thus resulting in lower exports.
In a conference on Friday, July 19, 2013, Prime Minister Manmohan Singh, said that India will have to boost up its exports in order to improve the Current Account Deficit (CAD). The iron ore exports had witnessed a decline in FY 13 which needs to be uplifted, he added.
In 2011, India had raised the export tax on iron ore to 30% from 20%, so that the mineral is sufficient for the domestic market.