India Government Calls for more iron ore export constrains

Indian Steel Minister Beni Prasad Verma called for curbs on exports of iron ore on Friday, as the central government heads into a budget that could raise export duty on the steel-making ingredient marginally.

"Yes, I am in favor of it. There should be more control on iron ore exports," Verma said on Friday.

Government is unlikely to approve a blanket export ban as it would prefer better regulation and incentives for increased domestic use of the steel-making resource, as demand in the world's second-fastest growing major economy rises.

In April last year, government raised the export duty on iron ore lumps to 15 percent from 10 percent previously. Duty on iron ore fines stood at 5 percent.

The ministry of railways hiked the transportation cost 50 percent to Rs 1,500 per tonne on January 27, but kept it unchanged in Friday's Railway Budget.

The government presents its budget for 2011/12 on Monday.

"There could be a marginal hike in export duty (of iron ore)," said Vasant Poddar, vice-president at the Federation of Indian Mineral Industries (FIMI), a trade body.

"These curbs on iron ore exports are not warranted as nobody in the world, be it Europe, Japan, South Korea and U.S. consumes our low grade iron ore, other than China," he added.

Supplies of the steel-making ingredient from India have been limited by a ban of shipments from the southern state of Karnataka, which is currently being appealed by exporters in the Supreme Court.