The Telegraph
Since 1st March, 1999
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Govt mulls ban on iron ore exports

Calcutta, Nov. 26: The government is considering a ban on iron ore exports in view of heavy demand from domestic iron and steel companies.

Sources said the current iron ore supply is not in tune with the domestic steel demand. If the ore continues to be exported, the domestic industry will suffer in the long run, they added.

The government has already prohibited exports of chrome ore to prevent scarcity in the domestic market. A similar step is expected for iron ore because the demand-supply situation is getting worse.

If the prohibition is notified, the biggest loser will be Tata Iron & Steel Company (Tisco), which had plans for extensive iron ore exports.

The industry, however, has been divided on the controversial issue. While a senior executive from Tisco has openly advocated the need for exports of chrome and iron ore at a recent meeting, Indian Charge Chrome Ltd joint managing director Subhrakant Panda has opposed the idea.

The Tisco official argued that if the ore is not allowed to be exported, the country will lose heavily to exporters from other countries.

Panda said the ore exports may bring some short-term gains for a few companies, but it will damage long-term prospects for all firms.

However, the steel ministry feels that the government should impose a curb, if not a total ban, through a notification as soon as possible.

“Otherwise, the scarcity of raw materials will loom large having a long-term impact on the industry,” a union steel ministry official said.

The steel industry, after a gap of over six years, is set to see an investment of over Rs 10,000 crore either in expansions or greenfield projects.

A large number of greenfield sponge iron plants are coming up in the eastern region. Several steel plants like Ispat Industries, Essar Steel and Tisco are expanding their existing capacities to meet the current demand pattern.

The steel ministry feels that there would be nearly 30-40 per cent growth in demand for iron ore. In this circumstances, exports of iron ore should not permitted, the official said.

Chrome ore is already showing a scarcity as its demand has grown by over 100 per cent in a short span.

According to sources, there are some players, including a large steel company, which are indulging in exports in the name of benification.

Benification allows a company to export some product for better value addition and then re-import it. But in most cases, re-import does not take place, sources said.

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