Differing sharply with the Commerce and Industry Ministry, the Mines Ministry favours export of all types of iron ore. It is also against canalising exports of high-grade iron ore through the State-run MMTC.
“Why allow exports of iron ore with 55 per cent ferrous content? The Mines Ministry is in favour of no restrictions,” a senior Government official told Business Line .
The Commerce Ministry had recently moved a draft Cabinet note on canalising high-grade iron ore exports as part of the strategy to curb illegal exports.
The Mines Ministry is also in talks with the Customs Department in this regard. “The Customs Department does capture export data. With some change in format, it can provide data for the sake of monitoring,” the official said.
He said involving an agency would unnecessarily increase export costs. MMTC will get about one per cent of the consignment value if exports are canalised through it. There is also apprehension of delays and more regulations. So, such a move should be avoided, he added.
The Mines Ministry is yet to firm up an official view. “We hope to finalise it soon and send our comments,” he said. However, the matter is unlikely to go to the Cabinet before mid-March, when polls end in five States.
The Federation of Indian Mineral Industries (FIMI) has also opposed the move to canalise exports of high-grade ore. “This would mean putting the clock back again,” said Mr R.K.Sharma, Secretary-General, FIMI. It has suggested a via media wherein mine owners should be allowed to export as it is. In cases where small miners or exporters face difficulties, the MMTC should step in.
The Justice M.B. Shah Committee on Illegal Mining has recommended a total ban. It argued that the main cause and incentive for illegal mining of iron and manganese ore were the huge profit in the export market (mainly China). The prices of these have gone up about 20 times without any benefit to the public exchequer.
Illegal mining
Even in the Action Taken Report on the panel's report, the Mines Ministry said that while iron ore demand due to exports is a reality, it cannot be held that exports are the reason for illegal mining. Rather, it is lack of governance at the State-level that has largely contributed to illegal mining.
India's iron ore exports have slowed down due to duty hikes and rise in freight rates, besides being impacted by mining curbs in Karnataka. The recent hike in export duty to 30 per cent has made Indian ore uncompetitive. The industry expects exports at around 50 million tonnes this fiscal.