Indian iron ore miners have cautioned that any move by the government to cap the domestic price of iron ore will be “fatal to the recovery of the industry”, an official at the Federation of Indian Mineral Industries (FIMI) said on Monday, March 27.
The FIMI official said that, logically if the government sets a maximum price for the raw material, i.e. iron ore, it should also set a similar maximum price for the finished product, i.e., steel, too.
The official said that iron ore production which was on an upward trend and consolidating growth over the last year will be “doomed” if the government scraps the pricing freedom of miners.
While official figures for the current fiscal year are yet to be announced, according to mining industry estimates Indian iron ore production during the fiscal year 2016-17 is expected to touch 180 million mt, the highest since 2010-11 when it reached 207 million mt, the official said.
The higher production expected in the current fiscal year comes on back of the 155 million mt achieved in 2015-16. It was pointed out by the official that sustained growth in production over two consecutive years indicates that mining is getting fundamentally stronger riding on steady gains in international prices and the improved local business environment.
But with the government working on a proposal to fix the market price of iron ore and with the possible announcement of the mechanism next month, the while turnaround in production growth will be aborted, the official added.