The Bangalore Chamber of Industry and Commerce (BCIC) has welcomed the Union Finance Ministry's move to hike export duty on iron ore from the prevailing 20 per cent to 30 per cent.
In a release, the President of the Chamber, Mr Vinod Nowal, said the chamber feels it is a significant step which will not only safeguard the interests of the steel industry but also curb illegal mining and conserve iron ore reserves for domestic consumption.
“This initiative of the Finance Ministry shall increase the availability of iron ore to the steel industry in the country by discouraging export,” he added.
The BCIC feels that iron ore resources of the country are limited and, hence, it must be conserved; however, the banning of the entire industry is not a long-term solution.
Per capita consumption
Although, India is the fourth highest producer of steel in the world today, it currently lags behind the world in terms of per capita consumption.
India's per capita consumption of steel is 51.7 kg (2010) which pales in comparison to the world average per capita consumption of 202.7 kg (2010).
Illegal mining, which was rampant in Karnataka, resulted in gross depletion of the country's scarce iron ore resources. Mr Nowal said “the Supreme Court, in its ruling, has imposed a blanket ban on mining in Karnataka. This has had negative repercussions toward the continuous operations of the steel industry in the State.”
Karnataka accounts for over 30 per cent of country's crude steel production. The effects of the ban on mining in the State have led to a severe shortage in iron ore availability to these industries.
“The iron ore exports in vast quantities from India are still happening when several steel companies and sponge iron units are closed due to lack of iron ore supply across the country.
“This initiative of the Finance Ministry shall increase the availability of iron ore to the steel industry in the country by discouraging export,” Mr Nowal added.
“India has a long way to go; we have to build a large number of dams, power plants, bridges, airports, ports etc, therefore, the country requires a robust domestic steel industry in order to sustain infrastructure development.
The rise in steel production in order to facilitate this growth shall require India's rich non-renewable iron ore resources,” Mr Nowal further said.