JOIN US“There is no government policy as of now to ban iron ore trade, but it may happen automatically in view of market dynamics across the world,” A S Firoz, chief economist, Economic Research Unit, Union Ministry of Steel said.
“Iron ore export, which is currently pegged at 120 million tonnes, may decline to 30-40 million tonnes by 2016, and I foresee total export volume going down at this point,” Firoz told mining representatives at the International Iron Ore and Steel Making Raw Materials Conference here.
The steel and raw material industry was passing through a tough phase because of the economic crisis in the US and Europe. The Chinese economy would also come under pressure, bringing down the demand for iron ore and hitting growth of the steel industry, the economist said.
Even if there is a demand for iron ore, its exports would be unviable in view of the unsustainable infrastructural costs, Fizoz explained. “Even if the price is $100 per tonne, most of the mining companies would be able to achieve only a breakeven, and this is not a great sign for the Indian iron ore industry. The current road and railway freight charges would further worsen the situation,” he observed.
He said Indian exports will come under significant competition from Australia and Brazil while China will not remain dependent on one country.
The one silver lining for the iron ore industry, however, could be spurt in demand for the domestic steel industry.