Meeting to discuss iron ore export ban put off

The meeting, convened by prime minister's principal secretary TKA Nair, was to be attended by secretaries of finance, commerce, steel and iron ore.

It was convened not because of a demand by the Karnataka government but because the steel ministry wanted a ban, or at least increase in export-related duties.The reason for postponement was not known.

While it is highly unlikely that the government will entertain the demand of the steel ministry, it may consider the demand to up the duty rates.

The steel ministry may agree for increase in export taxes from 15 to 20 per cent on iron ore lumps basically to ensure sufficient supply for the domestic steel industry.

It was only in April, 2010 the government hiked the rates from 10 to 15 per cent. The ministry wants export tax on iron-ore fines, kept unchanged at five per cent, to be increased to 10 per cent. However, the mines ministry is opposed to a blanket ban on exports as it says the Indian steel mills lack the technology to use all of the low-grade ore that would remain in the country if such a move went ahead.

Mines minister B K Handique had recently said that banning iron-ore exports may cause environmental hazards adding that unused low-grade ore may contaminate fresh water sources. “If the steel industry gets the technology to use the entire low-grade ore, the government may rethink its export policy. But right now, there is no case of banning iron-ore exports,” Handique had said.