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SURVEY: Iron Ore Records Negative Growth in India Due to Mining Ban

The ban on iron ore exports in India has resulted in a less-than-stellar outcome. Iron-ore cargo recorded negative growth of 13 percent in 2013-13 due t...

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|Jul 11|magazine5 min read

The ban on iron ore exports in India has resulted in a less-than-stellar outcome. Iron-ore cargo recorded negative growth of 13 percent in 2013-13 due to the domestic mining ban on the mineral, according to the Economic Survey.

The restrictions placed on iron ore mining in India have resulted in a shortage of the mineral, leading to large-scale import of the product from overseas.

“This is an irony that India has to import iron ore in spite of having large iron ore resources,” said JSW Steel Ltd, one of the largest steel companies in India.

“Indian steel manufacturers are losing out the most comparative advantage of availability of local iron ore and are constrained to resort to imports denting the competitiveness of steel manufacturing in India.”

The good news is container traffic at ports grew five percent to 980.49 million tons.

"The traffic in iron ore recorded negative growth of 13 per cent primarily owing to a ban on mining iron ore," the pre-Budget Survey for 2013-14 said.

In April, the Supreme Court allowed an annual cap of 20 million tons of iron ore to be extracted in Goa. The state has banned iron ore for nearly one-and-a-half years.

Major and non-major ports in India accomplished a 5 percent increase in 2013-14 as total cargo output was roughly 980.49 million tons.

"This is due to an increase of 1.8 percent or 555.49 million tons in the cargo handled at major ports," the survey said.

Traffic at non-major ports grew at around 9.6 percent during 2013-14, rising to 425 million tons.

During 2013-14, Enroe Port recorded the highest growth in traffic at 52.9 percent and mrmugao the lowest at 33.7 percent.

India has 12 major ports – Kolkata-Halida, Paradip, Visakhapatnam, Ennore, Chennai, V O Chidambaranar, Kochi, New Mangalore, Mormugao, Mumbai, Jawaharlal Nehru (JNPT) and Kandla.