New Delhi | August 9, 2016: Local value addition was a better way of reducing stockpiles of high-grade iron ore in Odisha and Jharkhand than removing the export duty, experts said.

Odisha last month approached the mines ministry for abolition of the 30 per cent export duty on high-grade iron ore so the state could sell its surplus stock in the international market. There were 162 million tonnes of surplus iron ore at mine heads countrywide on March 31, up from 128 million tonnes a year ago. The mines ministry sought the steel ministry's opinion. High-grade iron ore, with more than 58 per cent iron, is used to make steel. India expects a sizable investment in infrastructure, and conserving resources for local use will help keep costs under control.

"Countries that have a significant market for end-use products focus on local value addition rather than raw material exports. For India, raw material security is a key consideration," said Kameswara Rao, leader, power and mining, PwC India.

Iron ore production in the country during 2015-16 was 140 million tonnes against demand of 106 million tonnes. Some states tried to auction surplus iron ore but got a lukewarm response. The excess iron ore could have an impact on the environment and agriculture by spilling into rivers and farms, an expert said.

Railways freight for iron ore should be brought on a par with coal and manganese ore and the export duty on all grades of iron ore should be abolished to make exports viable, the expert added. The railways freight for iron ore is 14 per cent more than for coal and manganese ore.

(Source: http://www.business-standard.com/)