Govt to cut iron ore export by half
The government has decided to slash the volume of annual iron ore exports by half. The quantity has now been fixed at a minimum of 3.5 million tonnes (mt) against a level of seven million tonnes last year.
By Rakhi Mazumdar, TNN |
KOLKATA :The government has decided to slash the volume of annual iron ore exports by half. The quantity has now been fixed at a minimum of 3.5 million tonnes (mt) against a level of seven million tonnes last year.
The decision will have a direct impact on long term contracts for export of ore from National Mineral Development Corporation (NMDC), the largest exporter of iron ore in the public sector to steel companies in Japan and South Korea.
“The decision to curtail iron ore exports has been finalised. It envisages reduction in the volume to a minimum of 3.5 million tonnes per year. As usual, it will be valid for a period of five years,” top sources connected with the development confirmed to ET.
The move to reduce exports of ore is a direct fallout of the steel ministry’s initiative to cut down on iron ore exports and make it available to domestic producers. This had led to a serious stand-off between steel and commerce ministries.
The decision coincides with the renewal of the long term contract between Japanese and Korean customers and NMDC for a period of another five years, from 2006 to 2010. The earlier contract had ended on March 31, 2006.
Out of the total volume of 3.5 mt, about 2.5 mt of iron ore is slated to be mined from Bailadila mines, with another one million tonnes likely to be sourced from Donimalai mines. Both these mines produce ore with high iron (Fe) content of over 64%.
The steel ministry has been under intense pressure from domestic producers, many of whom have embarked on major expansion plans. India, which currently produces around 36 mt of steel, hopes to be able to increase it to 100 mt by 2020, as per the National Steel Policy.
A high level team of officials from NMDC and MMTC Ltd were in Japan last week to take part in the final round of negotiations on annual price contract with the Japanese steel mills and Korean steel companies. MMTC, under the union ministry of commerce, is the canalising agency for exports of ore with iron (Fe) content of over 64%.
The decision will have a direct impact on long term contracts for export of ore from National Mineral Development Corporation (NMDC), the largest exporter of iron ore in the public sector to steel companies in Japan and South Korea.
“The decision to curtail iron ore exports has been finalised. It envisages reduction in the volume to a minimum of 3.5 million tonnes per year. As usual, it will be valid for a period of five years,” top sources connected with the development confirmed to ET.
The move to reduce exports of ore is a direct fallout of the steel ministry’s initiative to cut down on iron ore exports and make it available to domestic producers. This had led to a serious stand-off between steel and commerce ministries.
The decision coincides with the renewal of the long term contract between Japanese and Korean customers and NMDC for a period of another five years, from 2006 to 2010. The earlier contract had ended on March 31, 2006.
Out of the total volume of 3.5 mt, about 2.5 mt of iron ore is slated to be mined from Bailadila mines, with another one million tonnes likely to be sourced from Donimalai mines. Both these mines produce ore with high iron (Fe) content of over 64%.
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The steel ministry has been under intense pressure from domestic producers, many of whom have embarked on major expansion plans. India, which currently produces around 36 mt of steel, hopes to be able to increase it to 100 mt by 2020, as per the National Steel Policy.
A high level team of officials from NMDC and MMTC Ltd were in Japan last week to take part in the final round of negotiations on annual price contract with the Japanese steel mills and Korean steel companies. MMTC, under the union ministry of commerce, is the canalising agency for exports of ore with iron (Fe) content of over 64%.
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