Iron ore exports are likely to decline 28 per cent this year on falling domestic production due to mine closures across the country.

According to R K Sharma, secretary general of the Federation of Indian Mineral Industries (Fimi), total exports are likely to slump to around 70 million tonnes (mt) this financial year, due to fall in production by major private mines.

Total exports from India declined 17 per cent to 97.65 mt in the financial year 2010-11 as compared to 117.37 mt in the earlier financial year.

Iron ore supply to domestic steel and downstream sector units was also hampered due to miners unwilling to continue excavation as domestic steel mills do not lift low-grade fines.

Meanwhile, low availability has helped the iron ore price rise to $190 a tonne for 63.5 grade iron content. Downstream sectors like foundry, sponge iron and pig iron units, however, are facing a huge slump in demand, due to an overall unfavourable economic environment.

Following a Supreme Court order two months ago, private mining in Karnataka is suspended. The central and state governments also went hard on mining clearances for iron ore miners in other states. Consequently, supply dipped 50 per cent as miners apprehend pumping in of fresh money on excavation, amid fear of action either by the government or the judiciary.

Exports from Karnataka are on hold for the last one year. Around 35 major mines in south Goa are also facing a tough time due to non-renewal of clearances from the environment ministry.