Industry body Assocham has cautioned the Government against the renewed demand of a section of mining industry for reviewing export duty structure on iron ore with malafide intentions of resorting to pressurising the government.
In a letter to the Steel Secretary, D.R.S. Chaudhary, Assocham said the structural deficit of iron ore availability for domestic steel industry is owing to an upper cap in iron ore production together with various environmental concerns.
Rather, Assocham said, the government must stay vigilant and not repeat the saga of illegal mining caused by unrestrained iron ore exports and interests of the steel industry should receive government’s attention.
“India has added huge capacity for agglomeration, that is, pelletlisation and sintering during the course of the past few years due to the Government decision to adopt fiscal measures to conserve iron ore resources against demand of steel industry to ban iron ore exports,” said Assocham while hailing the government’s policy to conserve natural resources by imposing 30 per cent export duty on iron ore and differential railway freight for domestic and export sector.
India has got about 115 million tonnes of agglomeration capacity against the production of over 101 mt of fines considering that India produced about 170 mt of iron ore in 2011 including over 66 mt of lumps and over 101 mt of fines.
“Thus the argument that India does not have enough capacity to utilise iron ore fines is incorrect and factually wrong,” said Assocham while adding that India is likely to have 170 mt agglomeration capacity (84 mt for pellet making and 86 mt sinter making capacities) by 2014.