The Indian government is considering urging Indian state-owned miner National Mineral Development Corporation (NMDC) to halt exports in response to demand from local steel mills facing a shortage of raw materials, a senior government official told SteelOrbis on Tuesday, June 3.
Since the country's largest iron ore miner is under the administrative control of the Ministry of Mines, and as the issue involves other ministries like steel and commerce, officials from these ministries will be meeting later this week to take a final decision, the official said. However, it is not clear as to how much of the shortage could be mitigated by suspending NMDC exports since overseas shipments by the miner have not been so large and it will be up to the various ministries to take a call on the issue.
According to the Federation of Indian Mineral Industries (FIMI), the closure of mines in Odisha last month is expected to reduce iron ore supply from the state by about 40 million mt per year against usual supplies of 70 million mt per year from the total of 56 mines operating in the state.
NMDC, the country's largest iron ore miner, produces around 32 million mt per year and exports are limited to just around 2 million mt per year to Japan and South Korea under long-term contracts.
The government will also have to take into consideration the risks of NMDC facing penalties by stopping exports to Japan and South Korea and thereby breaching the terms of long-term agreements, the official added.
As SteelOrbis previously reported, considering the possibility of iron ore shortages as a result of mine closures in Odisha, the Associated Chambers of Commerce and Industry of India (ASSOCHAM) said that there is a need to temporarily ban iron ore exports by NMDC.
