Iron ore exports from the country are unlikely to gather steam as weak global prices, oversupply and the prevailing steep export duty of 30 per cent on high grade iron ore lumps and fines would hurt realisations.

Add to this, the recent notification requiring miners to contribute to the District Mineral Foundation (DMF) is bound to add to the worries and make exports unviable. Analysts don't see an uptick in demand for exporters amid depressing prices.

"Iron ore exports would not be viable till the government drastically cuts the steep 30 per cent export duty. Globally, iron ore lumps prices are hovering around $60 mark and the downtrend may continue for a few more years. International iron ore prices should go up by 20 per cent to make exports viable. Currently, exporters from India have nothing to cheer despite reduction in distance based freight charges", said Giriraj Daga, portfolio manager at Mumbai-based SKS Capital & Research Pvt Ltd.

FOB prices of iron ore fines (62 Fe grade) in China have plunged to the level of $52 a tonne, a fall of 38 per cent since August 2014. The glut in iron ore market would continue despite shutdown of some small and mid sized mines as big miners like Vale, BHP Billiton and Rio Tinto are looking to expand production. Together, these three miners are expected to add over 30 million tonne (mt) iron ore output in 2015.

Iron ore exports from the country remained nil in August. Waking up to high freight costs, the Government of India on September 1 this year significantly reduced the distance based charges (DBC) on iron ore exports from the country. The DBC has been pegged at Rs 300 per tonne for all distance slabs ranging from 0 to 700 km. But even after reduction in DBC, exports still remain unviable as prices remain weak.

"I don't think any iron ore exports will happen in this fiscal as international prices have fallen to 2005 levels", said N D Rao, president, Pellet Manufacturers Association of India (PMAI).

Iron ore exports from the country are projected to be at the level of five mt by the close of this fiscal compared to 7.3 mt in 2014-15, marking a fourth straight year in decline. The country's iron ore production in 2014-15 stood at 129 mt, 38 per cent fall over the peak level of 207 mt logged in 2010-11.