BS reported that the iron ore production in India is expected to fall to 100 million tonnes for 2012-13 a drop of 28.5% due to mining ban in states including Goa and Karnataka. The production was 140 million tonnes in 2011-12 and 207 million tonnes in 2010-11.

According to Federation of Indian Mineral Industries, India is also set to become a net importer of iron ore in the current fiscal. The country was the world’s third largest exporter of iron ore recently but even the exports are declining.

The mining in Goa has been stopped completely, while the Supreme Court has partially lifted ban on mining in Karnataka. And in Odisha, the state government has put many restrictions on mining which is why the iron ore production in Odisha is expected to come down to 67 MT this year from 81 MT earlier.

Mr HC Daga president of FIMI said that “The government needs to ensure speedy clearances and if fiscal policies are reversed to pre 2010 level, then situation can be improved for the mining industry which is on a downward track. There is an urgent need for speedy forest, environment and other necessary clearances for pending or new mining licences. Fiscal policies also need to be relooked at.”

He said that “The increase in export duty along with high railway freight charges for iron ore has impacted the industry hard. The duty on iron ore exports had been hiked to up to 30% in a span of 2 years starting with December 2009. As a result, the export of iron ore has declined to 18 million tonnes from over 100 MT in 2010 to 2011. It is set to further fall to around 10 MT in current fiscal, making India a net importer of the raw material.”

He added that currently we are importing iron ore in the form of pellets and lumps. In 2012 to 2013, India has imported about 3 MT lumps and pellets. Imports during current financial year are expected to range between 20 MT and 24 MT.