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China looks beyond India for iron ore imports

With exports of iron ore from India to China declining sharply and the Indian government mulling to canalise ore exports as a measure to curb illegal mining activities, China is looking out for alternate sources to meet its huge raw material requirement.

“I don’t know the figure, I only know that export of minerals from India (to China) has declined in comparison to last year,” said Chinese Ambassador to India Zhang Yan.

“Our market is open to India. We want to buy iron ore from anywhere. If not India, we are going to buy more from Australia and Brazil and look for new sources in African countries,” Zhang said while speaking at a meeting on “Indo-China Trade Relations and Allied Matters”, organised by Utkal Chamber of Commerce, an apex body of industry representatives in the state.

The Centre-appointed M B Shah Commission, investigating into illegal mining activities in the country, has recommended a ban on iron ore exports in its interim report submitted to the government. Curbs put by several mineral-rich states such as Orissa, Karnataka and Goa have seen a significant decline in iron ore production and exports.

For example, iron ore shipment through Paradip port, a major bulk cargo handling port in the country, plunged to all-time low in November due to cancellation of trading licences and restrictions on movement of ore by road. The November shipment of high grade iron ore fines through Paradip stood at just 173,000 tonnes against 1.5 million tonnes in the same month last year.

“The new policies of the Central government and the states have led to a decline in exports of minerals, especially iron ores. We want the government to provide more conducive environment and liberal policies for Chinese companies to invest in India,” Yan added.

The bilateral trade volume between China and India reached $61.7 billion in 2010, which is 20 times more than the figure a decade ago. The two-way trade volume between January and December this year reached $60.3 billion and may climb to $70 billion by December end and $100 billion by 2015.

On the possibilities of forging business tie-ups in Orissa, he said, power, cement, steel, sugar, paper and fertilisers are the sectors that hold potential for the Chinese investment in the state.

Speaking on the occasion, senior leader of ruling party and Rajya Sabha MP Pyari Mohan Mohapatra said instead of exporting boilers for power plants in the state, China should set up manufacturing units here. Only super critical equipment should be allowed for imports.

Mohapatra said Chinese companies can look at the possibilities of trade and collaborations in sectors such as auto ancillary, pharmaceutical, micro small and medium scale enterprises and agro processing in the state.