Steel industry for freezing iron ore exports; increasing export levy

New Delhi, Mar 19 (UNI) Citing a projected swing in the domestic demand and exhausting reserves, the steel industry today demanded a complete phase out of the mineral's exports by 2011-12 in a progressive manner.

''We have suggested a quantitative cap on iron ore exports at current level, which is 90 million tonnes. The exports can be decreased by 15 per cent every year till they reach a zero per cent level in five to seven years time,'' said Indian Steel Alliance President Moosa Raza.

All major steel companies in the country including Tata Steel, JSW, Ispat, SAIL and Bhushan Steel are on an expansion drive, either brownfield or green field. At this level, the total iron ore resources will exhaust in the next 19-20 years, he told reporters at a conference organised by industry body Assocham.

The conference constituted representatives from JSW, Tata Steel, Sponge Iron manufacturers Association, Association of Indian Mini-Blast Furnaces and Steel Furnaces Association of India.

In a memorandum submitted to the Government, the industry said the steel consumption in the country is growing at 11 per cent year-on-year and is in a position to absorb whatever is produced.

The country is also transferring employment to other countries like Korea and China, which is the largest importer of Indian ore after Brazil and Australia, said Mr R K Kapur, President of association of Indian Mini Blast Furnace.

The Rs 300 per tonne duty on iron exports is a ''symbolic gesture,'' but is not enough to discourage the mining companies from selling the mineral abroad.

''For the past one year, we have been suggesting the government to impose at least a Rs 500 per tonne duty on the iron ore exports.

The loss made in the form of decreasing trade volumes will be offset by exporting value-added steel,'' Mr Raza added.

Contradicting the mining industry's view that the levy will create a dent in their profits, he said the spot iron ore sales prices have increased to 61 dollars per tonne in February from 51 billion dollars per tonne.

''At this price the exporters are left with a surplus of at least Rs 1,500 per tonne even after deducting all expenses and the export duty.'' UNI