Over dearth of raw material in India, ASSOCHAM has put a proposal to Modi government for halting NMDC to export 2.5 MnT Iron ore in Japan & South Korea.
The Supreme Court’s stay order for mining operations in Odisha has led to Iron ore scarcity across the country. Also, the dearth of raw material has pressured Steel & Sponge manufacturers to cut down their capacity utilization. To move out from this situation, the Modi government mulls to stop NMDC iron ore exports to Japan & South Korea. The government is likely to consider the proposal of Commerce Ministry to curb export of Iron ore by NMDC for next 3 years.
The Associated Chambers of Commerce & Industry of India (ASSOCHAM) had called a meeting on 5 Jun, 2014 to put a proposal for halting NMDC, India’s biggest miner, from exporting 2.5 MnT Iron ore to two nations.
Ministry of Commerce & Industry of India has agreed on the proposal of ASSOCHAM to protect domestic Steel & Sponge iron makers from shortage of Iron ore.
Since mining embargo at Karnataka in 2011, Iron ore production has been adversely affected. Subsequently, the several stringent actions taken by the Supreme Court to control illegal mining in Odisha has also lowered the raw material production. In FY14, India’s ore production had fallen drastically to 144 MnT as compared to an output of 219 MnT in FY10. It is anticipated to touch at 145 MnT in the current fiscal i.e. FY15, as per the Steel-360.
This scarcity of raw material has forced Steel plants and Sponge units to reduce their capacity utilization by 34% in FY14 against FY10.
A senior Commerce Ministry official stated to media, “The existing foreign trade policy has predicted that raw material demand by domestic steel industry has to be met first and the rest surplus may be exported”.
He further added that NMDC should halt Iron ore exports for 2-3 years, till the current scarcity situation is normalized.