India March iron ore exports seen falling a thirdWed Mar 28,...

India March iron ore exports seen falling a third
Wed Mar 28, 2007 7:43 PM IST
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NEW DELHI (Reuters) - India's iron ore exports are set to fall 32.3 percent in March from a year earlier because of an export duty slapped on sales, industry officials said on Wednesday.

The Federation of Indian Mineral Industries (FIMI) said customs data showed iron ore exports during March 1 to 20 at 4.98 million tonnes. It estimated sales in the remaining days of the month at 2.18 million tonnes.

In March last year, exports totalled 10.57 million tonnes, it said.

India's annual budget in February imposed a 300 rupees ($7) per tonne export duty on iron ore, after domestic steel makers demanded curbs on shipments to preserve enough supplies in future for the local industry.

"There is not a single vessel in Goa's Panjim port. The Chinese have said they would not buy iron ore from us," FIMI Vice President Rahul Baldota said.

India's iron ore exports in 2006/07 are estimated at 90 million tonnes, the same as in the year before, with more than half gobbled up by China.

India is the third largest supplier of iron ore to China after Australia and Brazil, but the outlook is bleak for sales with domestic steel makers demanding the duty be doubled to 600 rupees a tonne.

"If earlier you had 10 buyers for your product, now there are only two to three, and that too small ones," Baldota said.

He forecast exports would halve in the coming fiscal year that begins on April 1.

India's steel industry has drawn up massive expansion plans to feed an economy growing at about 9 percent a year, and wants iron ore reserves of about 23 billion tonnes to be preserved for domestic consumption.

"Our iron ore needs to be used wisely as an anchor for the growth and development of the domestic steel industry," Ajoy Kumar, a senior steel ministry official, told a conference in New Delhi on Tuesday.

"Iron ore is the prime reason why we have multinational corporations like POSCO and Arcelor Mittal want to get into India," he said.

Kumar said India's main draw for investment was its huge market and the availability of iron ore, while power and freight costs were higher than Asian countries like China.

India imports about 70 percent of its coking coal requirements.

Kumar estimated India's demand for iron ore at 23 billion tonnes by 2050, while only 15.6 billion tonnes could be utilised from local reserves because not all can be mined for environmental reasons.

India's demand for steel could reach 180 million tonnes by 2020 from about 43 million tonnes now, according to government projections.

India currently consumes 37.6 kg of steel per person, compared with 150 kg in developed countries.