National Mineral Policy 2006 - Department of Mines

7.58 Export of iron ore fines on a significant scale is a recent phenomenon, which hasbecome possible because of the unexpected and huge demand from China. The major steelplants in China, Japan, and South Korea have long-term contracts with resource miners inAustralia and Brazil and to some extent South Africa and India for their iron ore supplies, forwhich they negotiate prices every year. If the Chinese demand declines, Indian miners willfind their markets for fines dwindling. The SME sector mines will once again reduce theiroperations or become inactive. It is, therefore, in the national interest to promote pelletisation,calibration, beneficiation, and blending for exports on a large scale and to attempt to competewith Brazil and Australia in the export market. This needs to be done especially in the southwesternregion where the fines have a limited outlet. Some new technologies in steel makingthat may make the distinction between fines and lumps irrelevant are being developed.Examples are corex, finex, and hismelt, where the blast furnace may be capable of acceptingores of various types directly. However, the commercial application of these technologies isnot yet certain. All these aspects have to be borne in mind while reviewing the export regimefor iron ore.EXPORT REGIME FOR IRON ORE7.59 The current export control regime has been summarised in paragraph 7.48. TheMMTC has subsisting Long Term Agreements (LTAs) with one Korean and five Japanesesteel companies to supply iron ore of higher grades. These agreements are basicallyframework agreements indicating quantities and the price is negotiated every year. Thegovernment attaches importance to the implementation of these agreements as the buyershave been purchasing iron ore from India for many decades, when iron ore prices were low.The canalisation helps the MMTC to implement these LTAs. Apart from this, MMTC alsocarries out export operations on behalf of small miners who do not have the wherewithal toenter international operations by themselves.7.60 As stated earlier, the export licences are separately issued by virtue of the provision inparagraph 2.11 of the chapter on the General Provisions on Imports and Exports in the EximPolicy, which enables the government to issue licences even where a particular commodityhas been canalised for import or export. The Department of Commerce issues such licenceson the basis of applications filed by individual miners after ascertaining the position ofproduction and domestic demand from the Ministries of Steel and Mines and after checking166