The Hindu Business Line : Ferro alloy makers seek ban on export of ores

Mumbai, Jan. 17 First it was the turn of the steel industry to unleash a campaign against iron ore export on the grounds that India needed to conserve this vital raw material.

Now it is the turn of producers of ferro alloys, which is used in steel-making as de-oxidant and alloying agent, to rev up their campaign against export of manganese and chrome ores in the run up to the Union Budget.

The ferro alloys industry, which has some major players such as the Tatas, Jindals, Navbharat Group and FACOR, has pointed out that exports of these two ores are “starving” the industry of these critical raw materials needed to produce the alloys. With domestic steel production projected to sail past the 100 million tonne (mt) mark by 2019-20, the non-availability of domestic manganese and chrome ores could indirectly affect the steel industry’s growth plans, it feels.

As against a production capacity of 3.2 lakh tonnes (including manganese alloys, ferro silicon and chrome alloys), the industry produced only a little over 2 mt last fiscal, which meant a capacity utilisation of 62 per cent. “This fiscal too it will remain at this level, as ferro alloy imports have reined in our capacity utilisation,” Mr T.S. Sundaresan, Secretary General of the Indian Ferro Alloy Producers Association, told Business Line.

Imports cost more

But import of ferro alloys is not worrying the producers as much as the increase in export of the ores, which is prompting them to import these raw materials at higher costs.

The ferro alloys industry is estimated to have imported about 5.28 lakh tonnes of manganese ore in the last three years, valued at a total of about Rs 395.30 crore. During the same period, the manganese ore industry exported a total of 7.02 lakh tonnes, valued at about Rs 161 crore.

“If the manganese ore producers had not exported this quantity and had instead made it available to the domestic ferro alloy industry, it would not have imported the ore that had resulted in a forex outgo of Rs 395.3 crore in the last three years,” Mr Sunderesan said.

Considering the projected increase in steel production and the concomitant rise in demand for manganese alloys, the industry is estimated to require 2.6 mt of the ore by 2011-12 to produce the required quantity.

The miners of this ore are mostly Government-run such as the Orissa Mining Corporation and Metal Ore India Ltd.

The chrome ore is another vital raw material required to make ferro chrome and there is only one major producer of this ore — the Orissa Mining Corporation. Chrome ore is used to make high carbon ferro chrome, which is a non-substitutable raw material for making of stainless steel.

Industry sources say that during the last three years, about 12,500 tonnes of chrome ore, valued at Rs 16.4 crore, was imported. During the same period, the chrome ore miners exported more than 30 lakh tonnes of the ore. “The chrome ore industry produces about 3 mt annually, out of which more than 1 mt is exported in the form of ore and concentrates. If exports continue, the reserves of the proved category may deplete in another 10 years,” an industry source said.

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