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Govt rules out ban on iron ore exports from Odisha

12 February 2014

The central government has ruled out a ban on export of iron ore from the country's top producing state of Orissa despite recommendation by the Justice M B Shah committee for curbs on both production and export of the basic raw material for steel production.

The Justice M B Shah panel that investigated alleged illegal mining of iron ore in Odisha has found that a number of companies, including the country's top steel-makers, have illegally mined iron ore worth Rs59,200 crore ($9.5 billion) over a decade.

The Shah Commission's report, presented in parliament on Monday, said the mining in Odisha, which far exceeded permitted levels, was carried out under political patronage from 2000 to 2010.

The companies named in the report include state-run Steel Authority of India Ltd as also private sector biggies like Tata Steel, Jindal Steel & Power Ltd. (JSP) and the Aditya Birla Group.

Iron ore mining has been banned in two other producing states of Karnataka and Goa and this has helped competitors such as Australia, Brazil and South Africa push up exports to China, the world's biggest market for the steelmaking raw material.

The panel, which had earlier recommended restrictions on iron ore mining in Karnataka and Goa, has suggested a crack-down on illegal mining in Odisha and restrictions on exports, so that future generations are "not required to import iron ore."

Stoppage of iron ore production has already resulted in reduction in India's exports of iron ore by about 85 per cent (about 100 million tonnes) over the past two years.

With the production ban in Karnataka and Goa already resulting in the lowering of India's 2011 ranking to No3 among iron ore exporters to China, the central government is ''not in favour of a blanket ban on export of iron and manganese ores."

In fact, Odisha has forecast of a 5-per cent hike in iron ore production to more than 65 million tonnes, in the year ending March 2014.

The state government says it has already taken action against illegal mining over the past years but has no plan to change its mining policy.

The Supreme Court has partially lifted the ban on production of iron ore in Karnataka and Goa, but annual production remains capped at 30 million tonnes in Karnataka, where exports are banned.

In Goa, the government expects mining to resume before the monsoon starts in June, but shipments may take time to resume.

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