National Steel-Policy (NSP)-2017 envisages that; by FY-2031, per-capita steel-consumption in India will increase to 158-160 kg as against 95.2 kg in CY-2023. Also, steel has an output multiplier effect of 1.4 on GDP-growth. For meeting this ambitious target, India must boost production of Iron-ore which is key raw-material for producing steel.
As per IBM, total Iron-ore reserves in India are about 35.3 billion-tons. Out of which, as per exploration done so far, the probable and proven reserves are barely 6.4 billion-tons as on FY-2020. In last decade, India produced about 2.1 billion Tons of Iron-ore. For meeting target of NSP-2017, next decade production target should be about 4.0 billion Tons. Hence India must urgently convert the resources into actual reserve by spending heavily on the exploration. For which, budget provisions must be enhanced. States should also share burden since, they earn mineral royalty.
However, major quantity of Iron-ore production is below 58% Fe-grade which can’t be used in steel making. Therefore, Iron-ore having 55-58% Fe is exported and below 55% Fe is mostly dumped in the mines or blended with high-grade ore and exported. Minerals are finite resources and hence, its exports must be discouraged by levying appropriate export-duty.
Ministry of Mines (GOI) has recently constituted a high-level committee for promoting low-grade Iron-ore beneficiation. Currently, the export-duty on Iron-ore below 58%Fe is NIL. In the larger public-interest, the export-duty for 55-58%Fe Iron-ore must be levied @ 30% and for the ore below 55%Fe @15%. This will discourage export of Iron Ore and promote domestic beneficiation capacity and increase availability of usable grade ore for steel production.
Aforesaid suggestion is almost in line with the recommendation of aforesaid committee constituted in about May-2024. More so, appropriate technologies may be developed for beneficiating Iron-ore of below 55%Fe, especially for Hematite iron-ore.
After amending MCR Rules in 2012 and 2016, the Auction premium and Mineral Royalty is levied on the average sale price (ASP), as published by IBM every month. Such ASP includes Auction premium and Royalty. That increases the price of Iron-ore with multiplier effect and discourages the steel-producers for building new-capacities. This anomaly should be resolved for the healthy growth of all mineral based Industries and thus cut imports.
