Use technology to make steel directly from fines: Mines Secy

NEW DELHI: Months after quadrupling duty on iron ore fines' exports in the Budget, mines ministry today said until domestic steel producers brace for technology for making steel directly from fines, tightening of exports would not solve mining industry's problem.

Mines secretary S Vijay Kumar told PTI that the ministry was not disapproving of a blanket ban on exports of fines, but that enough palletisation capacity should be created for making use of the fines domestically.

"India uses fines for steel making only in the integrated steel plants. Sponge iron makers use lumps to produce over 30 million tonnes of steel annually.

"Now, we produce 50-60 million tonnes of fines and these come out automatically when we extract lumps from mines. If there are no domestic takers and exports discouraged, what will happen to these?" Kumar asked adding there was need for value addition of fines.

Finance Minister Pranab Mukherjee in the Budget for FY'12 had increased the duty on fines exports to 20 per cent from five per cent earlier.

He also withdrew export duty on iron ore pellets in order to encourage shipments of iron ore only after value-addition. Industry body Federation of Indian Mining Industries' repeated appeals to roll back the hike went in vain.

India, world's third largest iron ore exporter, produced 218 million tonnes of iron ore in 2009-10 and exported almost half of it, mostly in the form of fines.

Indian steel makers' requirement of fines do not exceed 30 million tonnes a year as only the major firms-- SAIL, RINL, JSW, Essar and Tata Steel-- use fines produced from captive mines or under long term arrangements.