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India's Federation of Indian Mineral Industries (FIMI) has urged the government to reconsider the proposal for mandatory beneficiation of low-grade iron ore, saying it is economically and technically unviable.
The government on 12 August sought industry suggestion as it looked to ensure utilisation of low- and lean-grade iron ore resources by mandating 80pc of total iron ore produced in a year by a mining leaseholder that is below 58pc Fe to be beneficiated to 62pc Fe and above.
FIMI has highlighted that setting up of beneficiation plants would require huge investment for land and for tailings disposal, that will be beyond the financial capability of small and medium private mining firms.
The mining body has also raised concerns over "whether there will be any buyer when the naturally occurring ore of the grade is available at a much cheaper price and its production is more than the demand", it said, adding that if the beneficiation is made mandatory, it could lead to shrinkage of iron ore mining.
FIMI said iron ore grade of below 55pc Fe should be beneficiated as steel, pellet and sponge iron plants use 55-58pc Fe grade by blending it with high grade ore.
India's steel minister Jyotiraditya M Scindia has recently underlined the need for raw materials security and said the country will need to boost its iron ore production to 437mn t by the end of the decade to meet the needs of integrated steel plants as well as of the secondary steel industry.
The government's proposal has also stoked concerns for western India's Goa, which is mainly abundant with low-grade iron ore.
"Goa's average iron ore grade is around 54pc Fe and even if you wash it, it comes to 57pc Fe, so it will not go above 58pc Fe," chairman of Mining Engineers Association of India (MEAI), Goa Chapter, Joseph Coelho said.
The process of beneficiation in Goa has been taking place for more than two decades, with its iron ore industry washing 45-50pc Fe grade, and then upgrading it to 54-55pc Fe, Coelho said, but added only 10-15pc of the state's iron ore can be upgraded to above 58pc Fe and thus the government should exempt Goa from the proposal.
Domestic iron ore industry has also been upended since the government imposed an export tax of 50pc on all grades of iron ore concentrates on 22 May, before which low-grade iron ore was not taxed, while anything above 58pc Fe ore was subject to an export duty of 30pc.
Indian ferrous associations have asked the country's finance minister to withdraw the export taxes on iron ore as it has made shipments unviable and has negatively impacted the domestic industry.
argusmedia
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