india bans iron-ore sales from captive mines

The following is from the website - miningweekly.com

India bans iron-ore sales from captive mines

By: Ajoy K Das
24th September 2012
Updated 4 hours ago

"KOLKATA (miningweekly.com) - The Indian government has banned, with immediate effect, the domestic sale and export of iron-ore fines from captive mines leased to steel producers.

According to a notification to all provincial governments issued by the Mines Ministry, invoking the Mineral Concession Rules, “the entire ore produced in mining operations shall be exclusively for own consumption in iron and steel making and cannot be either sold within India or exported to other countries”.

Most Indian steel producers with captive iron-ore mines consumed the mined lumps and left fines in dumps, or exported the material. Simultaneously, most steel producers were equipped to consume iron-ore pellets from fines as feedstock but did not have pellet-making facilities at their plants.

The Indian government’s ban on the domestic sale and export of fines from captive mines comes in the wake of the political controversy triggered last year, by the Jharkhand provincial government, which granted a one-time permission for the sale of 20-million tons of fines from captive mines to the Steel Authority of India Limited and Usha Martin.

The ban on the open market sale of iron-ore from captive mines coupled with suspension of operations of 93 mines in western Indian province of Goa for ‘irregularities and illegalities’ would further accentuate the slump in iron-ore fines exports from the country.

Exports of iron-ore from India was down 40% during April-June 2012 to 12.11-million tons, according to data of the Mines Ministry. Exports during 2011/12 were pegged at 57.35-million tons, 42% lower than previous year. The steady fall in export volumes along with a higher 30% export tax imposed this year, has pushed India to the fourth slot in global rankings of iron-ore suppliers, with South Africa picking up the third slot.

Apart from attempting to curb the arbitrary grant of permission for sale of ore from captive mines by provincial governments triggering off allegations of irregularities, the ban on open market sales was also in line with the Mines Ministry’s recent policy to force mine owners to not treat ore as a profitable waste but to invest in adding value to the scarce resource by setting up facilities for beneficiation and pelletisation.

According to the Indian Bureau of Mines, all integrated steel plants and coal-based DRI units in India use high-grade iron-ore lumps resulting in higher percentage usage of lumpy ore of 45% in iron making compared to a global average of 20%."

NOT SURE WHAT IMPACT THIS WILL HAVE ON THE AUSTRALIAN IO EXPORT MARKET, IN PARTICULAR RELATIVE TO THE LIKES OF FMG and AGO. IT COULD MEAN THAT SOME BUYERS OF INDIAN EXPORTS MAY NEED TO LOOK ELSEWHERE (ANOTHER COUNTRY) FOR ALL (OR SOME) OF THEIR PURCHASES. AM NOT SURE HOW MUCH OF INDIAN EXPORTS COME FROM "NON CAPTIVE" MINES. IT COULD ALSO MEAN THAT INDIAN MINE OWNERS WILL SPEED UP DEVELOPMENT OF BENEFICATION AND PELLETISATION FACILITIES AND IN THE LONG RUN, LOWER THEIR NEED TO IMPORT.

I JUST WANTED TO PUT THIS INFO ON THE HC FORUM TO GET SOME FEEDBACK AS TO HOW IT MAY AFFECT THE OZ MARKET, IF AT ALL. I DO APOLGISE IF THIS REPORT HAS ALREADY BEEN POSTED ELSEWHERE.


jmho/dyor