India Intelligence Report

Govt to Control Export of High Quality Iron Ore


Government is likely to control the export of high quality iron ore to build domestic reserves so a string of major steel projects can achieve their targets. India currently produces 38 million tons (mt) and wants to grow this capacity to 110 mt by 2020 powered by world’s largest steel maker Mittal Steel, 5th largest Posco, and India firms such as Tata Steel.

India has the highest deposits iron ore of 24 billion tons (bt) most of which is high grade with up to 65% iron content. Last year India exported 76 mt (of which 68 mt went to China) and this year the export is expected to be 80 mt.

China has about 46 bt but most of the deposits there are of poor quality. Therefore, China depends on the import of high-grade iron ore from India, Australia, and Brazil to power its economy.

Indian steel manufacturers have been lobbying the Government to stop the export of high-grade iron ore so as not to lose the advantage to China. Whereas, the exporters claim that the export of iron ore will not adversely affect the Indian economy because of large deposits and the lack of need for this amount of iron ore till after 5 years when the new steel mills will be required.


The National Minerals Development Corporation (NMDC) said that based on the Government’s stated sustained growth of 7.2% per annum, iron Ore production itself is expected to grow 600% by 2030 from the current 143 mt to 862mt. While India has 24 bt of iron ore, 45% of these deposits cannot be mined because of the collateral damage to the environment from mining. India produces 11% of the world’s iron ore. NMDC, which produces 14% of the Indian iron ore, says it wants to increases its production from the present 23 mt to 45 mt.

The decision by the Government is a step in the right direction. While export of iron ore may become quick income to exporters and earn foreign exchange, export of steel will add value to the resource and will fetch more revenue in the long run. What it can do is to facilitate to hasten the creation of these new mills by providing roads, power connections, and water.

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