Date:25/02/2006 URL: http://www.thehindubusinessline.com/2006/02/25/stories/2006022503950900.htm

Back Big rise in iron ore exports seen

Ambarish Mukherjee

New Delhi , Feb. 24

Despite all the discussions about curbing iron ore exports and assurance from the Ministry of Steel that this non-renewable natural resource should be preserved for national interest, the Railway Budget presented today projects a more than 13 per cent increase in iron ore exports during fiscal 2006-07 compared to 2005-06.

This projection, according to industry estimates, would mean a 15 million tonnes increase in iron ore exports next fiscal.

The Railways, which traditionally carries approximately 40 per cent of the iron ore that is exported, has projected that it will carry 52 million tonnes of iron ore for export purpose to the ports during 2006-07 as against 46 tonnes million during 2005-06, marking an increase of 13.04 per cent.

The roadways, on its part, carry 60 per cent of the iron ore meant for export. Four ports, namely, Visakhapatnam port in Andhra Pradesh, Mormugao port in Goa, Paradip port in Orissa and Haldia port in West Bengal are used for this purpose.

Industry experts estimate that in the coming fiscal also the share between railways and roadways would remain the same because it is mostly the smaller exporters, including small mine owners as well as merchant exporters, who use the roadways and large exporters handling huge volumes prefer to use the railways. However, there are exceptions like Goa-based Sesa Goa, which uses 100 per cent roadways because of logistical advantages while companies like RINL uses 100 per cent railway transport.

According to these analysts, if iron ore export tonnage for the railways increases by 6 million tonnes next fiscal, the same for roadways will go up by 9 million tonnes taking the total increase in iron ore export by 15 million tonnes.

The total amount of iron ore carried by the railways to the ports for exports is increasing every year though the share between railways and roadways is more or less stable since the past four years.

During 2003-04, the volume stood at 26.64 million tonnes. It went up to 36.41 million tonnes in 2004-05 and for 2005-06 the revised estimate stands at 46 million tonnes.