The state government banned iron ore exports from 10 ports during last month and plans to extend the ban to other ports as well  India’s second largest iron ore producing state Karnataka intends to put a blanket ban on the export of the raw material to facilitate the country’ssteel manufacturers. Sectoral experts and analysts also opine that iron ore conservation is critical to increase India’s steel output. In 2009-10, steel production stood at around 64.88 million tonnes (mt) and India expects to take it to 120 mt by 2011-12. Besides, the country’s steel lobby and political leaders are also exerting pressure at present to conserve the commodity for domestic use.
In a powerful stroke, the state government banned iron ore exports from 10 ports during last month and plans to extend the ban to other ports as well.
Speaking on the increasing influx of steel companies in Karnataka due to its rich iron ore deposits, chief minister B S Yeddyurappa recently said that the state aims to permanently stop issuing transport permits for export of the raw material.
Karnataka on high spirits
In June 2010, the state concluded MoUs[i] with ArcelorMittal (world’s largest steel firm), Posco (world’s third largest steel maker), Bhushan Steel Ltd and Surya Vijayanagar Steels and Power Ltd for setting up steel plants.
Updating the planned US$6.5-billion (bn) ArcelorMittal steel plant that is coming up in the state’s Bellary district, Mr Yeddyurappa said that the process of land acquisition is nearing completion. Approvals and other required facilities for the steel plant would be accelerated so that the company can commence production earlier, asserted Mr Yeddyurappa.
On the contrary, South Korean Posco’s US$12-bn steel mill project in Orissa has been delayed for more than 3 years primarily due to land acquisition problems. To expedite the process, the Prime Minister’s office stepped in and appointed a 4-member committee, which would be investigating a breach of law for acquiring land for the project. A final call on the project would be taken after the committee submits the report on August 16.
Karnataka further targets to raise its steel output from the present 12 mt to 40 mt over the coming 3-4 years.
Curb cheap steel imports
Robust demand from automobile and construction sectors, coupled with lower overseas prices surged India’s finished steel imports to 3.66 million mt during April-July 2010, up by 66% over the corresponding period in the previous year. Consequently, this has impacted sales and prices of domestic steel products, prompting domestic steel mills to request the government to check cheap steel imports.
“A majority of the imports during the aforementioned period include hot-rolled coils, key ingredients for making cold-rolled sheets and pipes,” reveals an official associated with the Steel Ministry, on conditions of anonymity. Most of the imports were from Chinaand eastern European countries, added the official.
The country’s finished steel output witnessed a marginal rise to 4.95 million mt in July, while demand stood at 5.07 million mt during the same period, resulting in aggressive import of the commodity.
Jeeta Bandopadhyay
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