Aug 04 2013
An inter-ministerial tussle may delay the centre’s move to lift the ban on iron ore exports and earn foreign exchange in a hurry to bridge the yawning current account deficit.
While the commerce ministry has proposed to approach the Supreme Court to lift the ban on different categories of iron ore exports, especially from Goa and Karnataka, the steel ministry is opposing the move.
The steel ministry, headed by Beni Prasad Verma, has pointed out that high freight rates and 30 per cent export duty have rendered iron ore exports unremunerative, especially with prices quoting at $110–$120 per tonne in the global market.
It has told the commerce ministry that instead of exporting iron ore, the government must encourage export of value-added steel products. The steel ministry has also contested the commerce ministry view that 100 million tonnes of surplus iron ore lying unutilised could be exported to earn precious foreign exchange at a time when the rupee has lost 9.5 per cent of its value against the dollar this year.
Steel ministry officials, who held a meeting with their counterparts in the commerce ministry on July 19, have pointed out that the reported headstock of 100 million tonnes iron ore was ‘misleading’.
Of the so-called estimated stock, state-run SAIL held between 50 million tonnes and 60 million tonnes of low-grade iron ore and slimes “that could not be sold in the open market”.
TURN
Another state-run company, NMDC, held 20 million tonnes of slimes, while the rest of the stock might be lying in Goa since their exports were banned. The steel ministry has also pointed to the inadequate capacities for pelletisation of excess slimes in stock.
The ministry has argued that iron ore reserves are not unlimited and need to be used more judiciously to meet the targeted 300 million tonnes steel production target set for 2025.
Prime minister Manmohan Singh set this target at an inter-ministerial meeting to boost manufacturing capacities. SAIL was to play the lead role and push for higher capacities through special purpose vehicles.
Steel ministry officials have asked their counterparts in the commerce ministry to find ways and means to have the ban on Goa iron ore mining lifted. They have argued that Goa iron ore was viable for exports even at current levels of duties and freight rates.
While agreeing that there was no shortage of iron ore in the country as of now, the possibility of problems in mining in Odisha may lead to localised shortages.
Pointing to serious repercussions in case the ban on iron ore export is lifted, the steel ministry has cited that the domestic steel industry could achieve only 81 per cent capacity utilisation during 2012-13.
The commerce ministry, on the other hand, is exercised about the fall in iron ore exports, as it contributed significantly to the country’s foreign exchange earnings. The commerce ministry, on its part, has maintained, “Since there was no shortage of iron ore for consumption locally, more ore should be made available for exports.”
India exported 168 million tonnes of iron ore worth $7 billion in 2010-11 and emerged as the world’s third largest exporter, before the Supreme Court banned export of most categories of iron ore. Ore exports fell to 18 million tonnes in 2012-13.
The Supreme Court ban came in the wake of a Karnataka Lokayukta report bringing to light serious irregularities in the sector. The ban was subsequently extended to Goa based on a report by the court’s central-empowered committee, effectively stopping exports from that state.
Following the ban and plentiful domestic iron ore availability, steel production is set to go up to 120 million tonnes in this financial year from 89 million tonnes produced in 2011-12.
Source:-www.mydigitalfc.com
No comments:
Post a Comment