Iron ore exports from the country have plunged sharply so far this year.
In the first 11 months of 2011, export volumes totalled an estimated 80 million tonnes. This represents a year-on-year fall of as much as 22 million tonnes.
First, it was Karnataka from where iron ore exports were prohibited; but subsequently the ban was lifted. It is now, Orissa's turn.
In November, preliminary export data suggest shipment of 5.1 million tonnes, down more than a third year on year. A major reason for decline in export volume is said to be Orissa.
The State Government has stopped issuing iron ore export permits for cargoes shipped via two ports in Andhra Pradesh, namely Gangavaram and Kakinada.
Non-submission data is said to be the reason for the embargo.
Orissa ban
While Paradip port accounted for about 14 million tonnes shipment so far this year, the two ports in Andhra Pradesh handled 4 million tonnes.
The Orissa Government has already enforced a ban on transport by trucks and has reportedly not been issuing export permits for the past 2-3 weeks, according to industry insiders.
The State Government is under pressure in the wake of investigation following allegations of illegal mining in Orissa.
India's peak export of iron ore was during fiscal 2009-10 with estimated shipments aggregating 117 million tonnes which declined to 97 million tonnes in fiscal 2010-11.
Interestingly, it was only earlier this month, the OECD Steel Committee (of which India is a part) talked about rising concerns over availability of raw material (notably, iron ore) supply to meet the global demand of the steel industry.
Export curbs
A related workshop emphasised the growing role of China and India, in addition to other emerging economies, in global demand for raw materials such as iron ore.
On the policy side, the workshop noted that export curbs applied to minerals and metal products have become more frequent, causing concern in countries that rely on imports of raw materials for steelmaking.
At the same time, it is absolutely essential that finite raw material sources like iron ore are conserved in the country for future requirement.
But the real issue at hand is not domestic availability for the future, but suspicion of ongoing illegal mining for the lucrative export market.