FIMI asks K'taka govt to take steps to rectify gross imbalance from iron ore exports prohibition

New Delhi: The Federation of Indian Mineral Industries (FIMI), Southern Region has made an appeal to the Karnataka government to take appropriate steps to rectify the gross imbalance following the prohibition on iron ore exports from the state.

According to FIMI, prohibition on iron ore exports from Karnataka has led to a revenue loss of Rs 3,000 crore per annum to the State.

In a letter to Karnataka Chief Secretary, FIMI, Southern Region has appealed “to take appropriate steps, including by placing the necessary facts before the Supreme Court, in order to rectify the gross imbalance that has arisen due to the prohibition of exports/ restrictions in sale of iron-ore from Karnataka…”.

The Karnataka government in July 2010, had imposed a blanket ban on exports, which was subsequently upheld by the Supreme Court in 2011. Due to the ban, iron-ore mined from Karnataka cannot be sold outside India.

Karnataka faces a peculiar disparity owing to the restrictions, as the steel industry is free to import from other states as well as from other countries, while miners are allowed to sell through e-auction only to end-users in and around Karnataka, it said.

It further said that in FY19, the restrictions had resulted in artificial supply of iron ore in the state, leaving the domestic iron ore unsold.

“In the present scenario, when there is an adequate supply of iron ore in Karnataka by the A&B category mines owing to enhancement of cap by the Supreme Court in December, 2017 preliminary to meet the increased demand by the domestic steel industry and further with the C category and expired leases auction the steel industry has more than adequate reserves available domestically,” the letter said.

Most of these auctioned mines are purchased by the steel industry which is the captive user of these mines leading to self-sufficiency as a result miner in Karnataka need an alternate market to sell their ore.

The export and import in the country are governed by the Exim Policy of India whereas Karnataka is the only state which is not permitted to follow the same, the letter said.