BANGALORE: The Federation of Indian Minerals Industries (FIMI) on Tuesday said the export avenue for iron ore should not be switched off as it provided cushion against fluctuations in domestic market.

If the needs of domestic steel industry were compelling, the exports could be tapered off, it said.

Addressing a press conference at the conclusion of a two-day Indian Iron Ore Summit here, FIMI president D.K. Sahni was responding to steel manufacturers' demand for restriction on exports.

Good reserves

He said while iron ore reserves were estimated at 25.25 billion tonnes, domestic steel consumption was far below the international average.

"With the growing domestic consumption of iron ore by the steel industry, exports may taper off.

"However, the export avenue should not be entirely switched off as it provides cushion against fluctuations in domestic market or vice versa," Mr. Sahni said.

It was necessary that no new captive mines should be given to any existing or prospective steel plants till the surplus capacity in non-captive mines were fully utilised.

LTA with China

Mr. Sahni said FIMI was persuading the industry to adopt long-term agreement (LTA) as the exporters had to reconcile to certain practical problems of stable and competitive pricing.

FIMI was of the view that such a pact would offer comfort level to both the industry and the investors in the infrastructure for transporting iron ore to ports. Mining industries' willingness to have the pact was in response to a suggestion by the Union Secretary for Steel and Mines, A.K.D. Jadhav. India accounts for 25 per cent of all iron ore imports by China.

On the proposal to increase royalty to state Sovernments, R.K. Sharma, FIMI secretary-general, said: "We agree what we are paying is a pittance." The industry was not against paying higher royalty to the State governments.

He said the Anwaral Hooda Committee on Mining Policy had suggested 7.5 per cent (of the sale value) as the benchmark rate.

A committee set up by the Government was likely to give its recommendation in three months on the new rate.

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