FIMI concerned over import of iron ore by steel makers in Karnataka

Bengaluru: The Federation of Indian Mineral Industries (FIMI), Southern Region, seeks intervention of the Karnataka government and Ministry of Mines in stopping import of large quantities of iron ore by steel manufacturers from outside despite availability of huge stocks of the mineral in the State.

FIMI has raised serious concerns over the impact on employment, revenue, and infrastructure development in the State because of rising imports of iron ore while there is abundant supply & stocks in Karnataka. The concurrent restrictions on trade of iron ore in Karnataka is suppressing the growth of the sector and have significant deleterious effects on the industry and also the State exchequer, FIMI said.

In the State, around 4 lakh metric tonnes of iron ore had been imported in October 2020 from eastern part of India through South-East Railway, which is almost 1620 kms. FIMI had earlier highlighted the issue with the department of mines in November 2020. In the past four months since FIMI has raised concern with the state government, almost 15 lakh MT of iron ore has been imported into the State.

Transportation of iron ore across 1,620 kms is completely carbon negative and environmentally unfriendly. "The restrictions on trade of iron ore in Karnataka is suppressing the growth of the sector and have significant deleterious effects on the industry and also the exchequer.

The rest of India is exporting iron ore as per the EXIM policy of Government of India thereby ensuring fair revenue to the State including foreign exchange as well as overall growth of the nation by using the railways, port facilities etc. As per the data available, the total export in the year 2019 from other parts of India shows export of 10.34 million MT of fines and 1.16 million MT of lumps.

These restrictions are also distorting the market as the buyer has the freedom of trade, i.e. right to purchase iron ore either through e-auction or from other States or even import from overseas.

This has created a skewed market, disadvantageous to sellers as they can only sell to domestic end-users," FIMI said in a statement. Earlier, FIMI Southern Region had written to the Ministry of Mines appealing to take appropriate facts and urgently submit necessary specifics before the Supreme Court, in order to rectify the gross imbalance that has arisen due to the prohibition on exports and seek urgent rectification of the situation by permitting export of iron-ore from Karnataka.