Steel cos, miners fail to agree on ore export figures

MUMBAI: The stand-off between mining and steel industries vis-à-vis iron ore exports is set to escalate in the coming days. Contrary to the claims made by major steel companies, key players in the mining sector maintain that iron ore exports from India have actually fallen sharply in March this year.

“Iron ore exports in March are down 33% over exports in the same period last year,” RK Sharma, secretary general, Federation of Indian Mineral Industries (FIMI), said in a note late Tuesday, adding that the steel industry is “trying to portray a wrong picture”.

Mr Sharma’s statement comes close on the heels of reports by the Indian Steel Alliance (ISA), a representative body of integrated steel producers, which maintained that the iron ore exports had increased in March, despite the recent Rs 300-per tonne duty levied by the government.

India is home to one of the best quality iron ore deposits — about 23.5 billion tonnes of proven reserves — and ranks among the top five in the world. Iron ore is a key raw material in steel-making and is the prime reason for global majors such as Mittal Steel and Posco to build a steel plant in India.

Contesting the claims that 6.3-million tonnes of iron ore have been shipped from eight major and three minor ports of the country up to March 15 this year, data provided by FIMI puts the figure at 4.98 million, that too up to March 20. “We have never come across such a gross misrepresentation of facts quoting official agency, namely the Indian Ports Association,” said Mr Sharma.

FIMI says exports in March 2007 are down in some cases by 66% and on an average 50%. “As a matter of fact, the upward trend of about 10% increase is limited to the first 11 months of the current financial year. This is only due to the levy of export duty on iron ore,” explained Mr Sharma.

According to FIMI estimates, exports in March will stand at about 7 mt , instead of 12.6 mt, as claimed by the ISA. Mining officials added volumes are generally high in March as customers ask for more before the new rates come into affect from April 1. Iron ore prices are slated to increase by 9.5% from the new financial year.

“There cannot be anything far from truth. Lumps in the domestic market fetch better prices than fines. Further, there is no bar on the export of lumps and it does not make any sense to crush them into fines for export when lumps fetch better price in the international market as well,” said Mr Sharma.