Orissa, India's biggest iron ore producer, has put through a proposal to the central government to place a ban on exports in order to protect its domestic market, according to Reuters. If the proposal goes through, China which gets about 100 million tons from Indian annually, will be the country hardest hit.
The state government has asked Orissa, which is state owned, to keep 70% of its iron ore lumps and 80% of its chromite ore for local use, according to The Economics Times. The state of Karnataka also banned exports in July last year to deter illegal mining.
China relied on India for about 20% of its iron ore imports in May which dropped to 6.4% after the Karnataka ban according to China Daily.
Global prices have already been affected by a dip in coking coal supplies from Australia. Floods in Australia have cut 5%, or about 14 million tons, of global coking coal supplies, according to Reuters.
Iron ore costs have more than doubled in the last two years because of rising demand in India and China. Prices in China are now expected to soar an additional 7% this quarter according to Bloomberg.
India Orissa state wants export ban on iron ore-min
BHUBANESWAR, India Jan 12 (Reuters) - India's eastern Orissa state is seeking a ban on exports of all iron ore grades and the proposal is likely to be sent to the federal government in a month, the state's steel and mines minister said on Wednesday.
"We have to get the approval from the finance department and the chief minister. Then we will send a specific proposal to the government of India," Raghunath Mohanty told Reuters.
"It may take fifteen days to one month's time maximum," he said. (Reporting by Jatindra Dash; Editing by Aradhana Aravindan)
Extremely good thing Visakhapatnam Steel Plant has been operational since 1987 and till date the government has not assigned its own iron ore mines such is the GoI lethargy.The VSP folks really have a tough time because of this handicap and this steel plant is the largest producer of steel in the country,blooms,billets and coils limited
If I am correct then SAIL bokaro steel plant has highest steel production capacity. It has 6 blast furnaces and Vizag has 4 blast furnaces. actually bokaro steel plant was supposed to have 10 blast furnaces but Biju patnaik decided to move 4 remaining furnaces to Vizag after problem with a local leader named smaresh singh regarding compensation to displaced locals . Now back to the main point its a wise move with aim to conserve resources for future.
Yet another thing to factor in is that rising Iron Ore prices will slow down infrastructure development in PRC. Sweeeet! In fact, India should simply place as many road-blocks when it comes to export of Iron Ore, which is a strategic mineral, especially if the export is to PRC.
A wise move? Maybe. All the results only affect india: moving profit from miner to steel producer. That is all.
Slowing down infrastructure development in china, I doubt it. Buying from india or Australia, brazil etc makes no significant difference for China steel industry.
Exporting iron ore will fetch revenue but exporting cars, railway wheels, bridge strusses will generate more revenue. If we export iron ore, the importer will use them to create some finished products. That will create jobs there. If we stop export of iron ore and only allow finished products, we generate jobs here.
If PRC thinks it is better for them to import from Brazil or Australia, then so be it. If, as you say, it makes no difference to PRC, then all the best to you. You should consider the distance between India-PRC and Brazil-PRC. You see, shipping companies do not offer free shipping services.
PM, transpiration cost is negligible compared to material cost. So it may will not make any difference to china. But yes I am a big believer of saving Indian resources for now to be used 30-40 years later when others dry up. Use only as much is required for our industry. Forget exporting anything. May be don't use any at all and import all. It will pay dividends. We have to start to look to preserve resources for the future. Mankind will probably last only another 100 -150 years to the max the way we are eating up all resources and fighting each other. Keep some for the last 50-100 years.
This was waiting to happen, finally the balls have set rolling, there are lot of steel plants which are on expansion mode, we need to provide them with enough reserves to operate. My only worry is coal, India have lot's of coal, but not of high grade. We largely import them, so need to create more suppliers.
Since you are in the metal related industry, you know better than I, so I will take your word for it.
We are importing coal from Australia already. We are not using the coal that we have because of (1) low grade and (2) depth. I am sure if cost of coal goes up then we will harness the low grade coal, process them through pyrolysis and use them.
I think many of us agree that we need to stop or limit export of our iron ore.
Pmaitra, I am advocating of fuel bank in the line of natural Uranium for us, we have lot of Uranium, which is not mined at all. And we are importing and creating fuel bank. Although coal will take lot of space as compared to Uranium, but some thing has to be done for coal, we can keep something like 10 year of coal extra as reserve.
Steel products cost say about $1000 a ton. One 20' container costs $20,000. To transport that, depending on the season traffic varies between $500-2000 per container. Do the math. At best 1%. this is for steel.
Percentage will be a little higher for iron ore but still insignificant in the difference between transporting from brazil or from India.
With new techniques, the amount of coal needed to produce steel is decreasing constantly, but as of now this is the primary medium. I heard of using EM induction to generate enough heat to melt the ore, but not sure how it works.