India may have to start importing iron ore soon: Steel Ministry
The Steel Ministry is of the view that India will have to import iron ore in the immediate future to meet significantly increasing demand from domestic companies.
“With many projects in the pipeline, both brownfield and greenfield expansion of steel capacity, iron ore requirement will increase significantly leading to imports of iron ore in near future,” the Steel Ministry has said in a recent presentation to the Planning Commission.
The Ministry in its mid-year plan review has identified iron ore availability as one of the challenges to achieve the steel production target of 300 million tonnes per annum (mtpa) by 2025.
With current production capacity of around 90 mtpa, India needs at least 140 million tonnes (MT) iron ore to meet its need. It requires 1.5-1.6 MT iron ore to produce one million tonne of steel.
“Domestic requirement of iron ore is increasing with the capacity addition in steel production. Between the 2008-09 and 2012-13 period, the demand for iron ore has gone up from 87.4 million tonnes (MT) to 124.8 MT,” it said.
India, the world’s fourth largest producer of steel after China, Japan and the US, had produced 78.31 MT steel during 2012-13. It is likely to slightly inch up in current fiscal.
During the January-October period of the current year, India produced 66.38 MT steel.
The Steel Ministry also said iron ore production has come down from 213 MT in 2008-09 to 136 MT 2012-13 due to ban on mining in Karnataka and sharp fall in production in Odisha.
“It would require sufficient time for 200 MT plus production (of iron ore),” the Ministry said.
The government has already taken steps discourage iron ore exports by raising the duty to 30 per cent.
As per the United National Framework Classification (UNFS) of mineral resources, total resource of iron ore in the country is around 28.51 billion tonnes, as on April 1, 2010.
Country’s iron ore production is expected to rise in the coming days with the Supreme Court partially lifting ban on iron ore mining in Karnataka, a producing state.