From Our Special Correspondent
Daijiworld Media Network - Panaji

Panaji, Nov 19: India foresee severe decline in the Iron Ore exports considering the growth of Steel industries in the country and also competition from other global players like Australia and Brazil, a senior official said.

Dr A S Firoz, Chief Economist, Economic Research Unit (ERU), Ministry of steel said that it is not the government policies but the market forces that will result in the decline of the iron ore export from the country, which is currently pegged at 120 million tons at present.

Participating in the International iron Ore and Steel Making Raw materials conference here in Goa, Firoz said that  there would be gradual decline of iron ore from India whether there are restriction or no restriction.

“It would be decline to 30-40 million tons by 2016,” he predicted.

The conference organized by Ore Team, an international research firm had representatives from countries like China and Indonesia.

Firoz said that the steel and raw material industry is passing through challenging time and new ideas are required to see what’s ahead for both the industries.

"Global economies are not doing well. Chinese economy will also come with the pressure resulting in the reduced demand of iron ore as it will also affect the growth of steel industry,” he stated.

The official claimed that 'if there is a demand the exports would be unviable proportion considering the infrastructural costs.’

“If price is 100 US dollars most of the mining companies would have just a break even.. Given the current road and railway freight nobody would be making money.. Long term iron ore price would remain about 90-100 US dollars which is not a great sign for Indian iron ore minors considering the infrastructure cost,” Firoz commented.

In a positive sign, Firoz said that the Iron Ore would be in demand for the local Steel Industry, which is on a growth path. “If all the steel industry projects are completed in time, there would be huge demand for the iron ore, which would restrain the exports,” he predicted.

The ministry official said that the Indian exports would come under significant competition due to investments in countries like Brazil and Australia.

“Some of the projects in these countries have been delayed due to environment clearance. Within 4-5 years lot of mining capacity will be generated in the places like  Australia and Brazil,“ he said.

“Many Chinese companies have invested in Australia.. Either they will bring those iron ore to their own country or do hedging,” he said.

The two day long conference was held in Goa at the backdrop of crisis looming large over the Iron ore export industry in the state.