Indian iron ore miners counter steel mills’ claim of raw material shortage

Tuesday, 27 October 2020 12:27:55 (GMT+3)   |   Kolkata

Escalating the face-off between Indian iron ore miners and steel producers who are seeking a ban on exports of iron ore from the country, the Federation of Indian Mineral Industries (FIMI) has submitted counter-arguments to the government, claiming that surplus of such raw materials are lying idle at pitheads, according to the communication submitted.

In its communications to the Ministry of Steel and Ministry of Commerce, FIMI, the apex representative body of domestic miners, said that the claims of the Indian Steel Association (ISA) seeking a ban on exports of iron ore in view of a shortage of raw material faced by steel mills is not supported by data regarding availability of iron ore in the market.

Providing supporting data, FIMI said that iron ore stocks lying across mine-heads had increased to 162 million mt during 2018-19, up from 151.44 million mt in 2017-18, 148.86 million mt in 2016-17 and 144.44 million mt in 2016-17.

“By seeking a ban on exports, ISA has simply skipped the availability of iron ore lying at mine heads. Any shortfall in production due to the Covid-19 pandemic in the eastern states can be made good by procurement of stocks lying at mine-heads. No mining lease holder would like to export if there is a domestic buyer. Currently, what is being exported is what is not being bought by domestic steel mills,” FIMI said in its note to the ministries.

“The total requirement of iron ore in the country is 165 million mt against a production of 206 million mt. Since the production of iron ore is in surplus and a lot of material is available to users in sponge iron production, iron ore pellet manufacturing and steel mills are very choosy and only buy grades above 62 percent Fe content,” FIMI said.

According to the miners’ body, steel mills located in the southern state of Karnataka are actually importing iron ore for their steel mills to depress prices in the local market at a time when huge stockpiles of raw materials are available within the state itself. It pointed out that stockpiles of unsold iron ore in Karnataka rose to 12.80 million mt in 2018-19, up from 8.70 million mt in 2017-18 and 4.60 million mt in 2016-17.

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