Wednesday, 13 Jul 2011 |BS
BS reported that to address the several restrictions on iron ore exports, many mining and steel companies have decided to invest in the processing of low grade iron ore into pellets, the processed raw material used for making steel.
With the restrictions, steel and mining majors such as JSW Steel, Essar Steel, Ispat Industries and NMDC have decided to invest in making pellets to feel steel plants. Their combined plans total INR 8,000 crore in the next four years, to establish pelletisation capacity of 40 million tonnes a year.
Mr Haresh Melwani CEO of H L Nathurmal & Co a Goa based iron ore miner and exporter said that “The industry requires INR 20,000 crore to process the entire amount of exportable fines, which looks impossible at this point in time unless steel mills take an aggressive initiative.”
Mr RK Sharma secretary general of FIMI said that “The government is inviting a big risk by forcing iron ore miners to set up pelletisation plants to convert iron ore fines into pellets. Despite incurring a cost on conversion, miners are unlikely to get adequate remuneration, as pellets need to compete with high grade iron ore. Steel mills may prefer to use lumps instead of pellets at a premium.”
The Indian government has already levied 10% ad velorem royalty on iron ore mining and this is likely to be doubled. Also, the proposed changes in mining rules call for an amount equal to the royalty to be paid for the welfare of project affected people. The government has also levied a 20% export duty.
BS reported that to address the several restrictions on iron ore exports, many mining and steel companies have decided to invest in the processing of low grade iron ore into pellets, the processed raw material used for making steel.
With the restrictions, steel and mining majors such as JSW Steel, Essar Steel, Ispat Industries and NMDC have decided to invest in making pellets to feel steel plants. Their combined plans total INR 8,000 crore in the next four years, to establish pelletisation capacity of 40 million tonnes a year.
Mr Haresh Melwani CEO of H L Nathurmal & Co a Goa based iron ore miner and exporter said that “The industry requires INR 20,000 crore to process the entire amount of exportable fines, which looks impossible at this point in time unless steel mills take an aggressive initiative.”
Mr RK Sharma secretary general of FIMI said that “The government is inviting a big risk by forcing iron ore miners to set up pelletisation plants to convert iron ore fines into pellets. Despite incurring a cost on conversion, miners are unlikely to get adequate remuneration, as pellets need to compete with high grade iron ore. Steel mills may prefer to use lumps instead of pellets at a premium.”
The Indian government has already levied 10% ad velorem royalty on iron ore mining and this is likely to be doubled. Also, the proposed changes in mining rules call for an amount equal to the royalty to be paid for the welfare of project affected people. The government has also levied a 20% export duty.
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