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Government may unveil incentives for iron ore beneficiation

Indian government has hinted at rolling out more incentives for beneficiation of low grade iron ore in the country.

Mr ACR Das industrial advisor to union steel ministry at an industry conference said that "We are in the process of drawing up a plan to give some interest subsidy to iron ore beneficiation technology. The final report on it will be given to the Planning Commission.”

Mr Das said that pelletization of unused iron ore fines will be needed in a big way to meet the raw material requirement of the growing steel industry."

India's steel production is projected to reach 150 million tonnes by 2016-17 from the current level of 72 million tonnes, he said, adding that "pelletisation of unused iron ore fines will be needed in a big way to meet the raw material requirement of the growing steel industry." Mr Das said India's iron ores reserves are pegged at 25 billion tonnes but mining of high grade iron ores is limited and cannot sustain the development of steel industry.

In December 2011, the government had hiked iron ore export tax to 30% to help the domestic steel industry, which has been grappling with iron ore shortage due to the mining ban in Karnataka. Also, iron ore pellets have been fully exempted from export duty to encourage the value addition process for fines.

In this year's budget, customs duty on mining equipments, including equipment for pellet plant was cut from 7.5% to 2.5%. "The government's recent policy decisions will lead to diversion of iron ores from export to meeting the requirements of domestic steel industry," said. Dr A S Firoz, chief economist, Economic Research Unit, ministry of steel. "However, there is a need for doing a lot of R&D on pelletisation before it becomes an effective tool to utilize unused iron ore fines. This may not be a lucrative proposition at this unless issues like taxation on mining, environmental concerns and land acquisition are effectively dealt with," he added.

Some of the big steel players like SAIL and Tata Steel are also taking the pelletisation route. S S H Naqvi, senior VP, Jindal steel and Power Ltd, said: "Low grade iron ore fines can be effectively used through pelletisation. Dr A K Mukherjee, Principal Scientist, Tata Steel R&D, said: "We need to maximise our iron ore reserves and for that low grade iron ore fines need to be pelletized even though beneficiation of wastes is a big challenge." Dr D Mukherjee, executive director RDCIS, SAIL, said: "Pelletisation of low grade iron ore fines will be a win-win situation for both the miners and the steel industry."

Dr AS Firoz chief economist of Economic Research Unit ministry of steel said that "However, there is a need for doing a lot of R&D on pelletisation before it becomes an effective tool to utilize unused iron ore fines. This may not be a lucrative proposition at this unless issues like taxation on mining, environmental concerns and land acquisition are effectively dealt with.”