Business Line reported that Indian iron ore pellet making companies have urged the Government to provide incentives to use the 150 million tonne of low grade iron ore dumped as waste by miners.

Mr ND Rao VP of Pellet Manufacturers' Association of India said that “The Government should consider reducing the royalty on sale of these low grade iron ore dumps to make the process of beneficiation viable. Reducing royalty would not only help dispose the dumps safely but also aid in conserving key ingredient used in steel making”

In a recent meeting with the Union Commerce Ministry, the association has asked the Government to remove the 5% export duty imposed by the previous Government. It has argued that this levy is choking the industry and will stunt its growth.

The association said that the lower domestic demand has resulted in lower capacity utilisation of less than 50% against the global average of 80%.

Pellet exports have almost come to a standstill ever since the Government imposed the 5% Customs duty. With large steel players setting up their own pellet plants and exports hit by the duty, the capacity utilisation of standalone pellet plants are expected to drop further.

India has an installed pellet making capacity of 67 million tonne as of March, 2014. It is estimated to touch 91 million tonne by the end of this fiscal. Most large steel companies such as TATA Steel (3 million tonnes), JSW Steel (3 mt), Essar Steel (6 mt), Jindal Steel and Power (3 mt) have invested heavily in pellet plants in Chhattisgarh and Odisha.