India ranks fourth within the world of iron ore production and ninth in steel production and exports about 52% of the total production. As per United Nations Framework Classification (UNFC), the present iron ore deposits in India are estimated at 6.312 billion tones, when the total resources are placed at 22.108 billion tones.
While the deposits of magnetite ore are restricted to the states of Karnataka (Bababudan, Kudremukh, Bellary), Andhra Pradesh (Ongole and Guntur) and Tamil Nadu (Salem, Tiruchirapally), hematite ore is available in abundance in Jharkhand, Orissa, Chhattisgarh, Karnataka and Goa. Jharkhand and Orissa together, have the largest hematite bearing zone with iron content (Fe) up to 65%.
Chhattisgarh has the distinction of holding the largest quantity of high grade iron ore reserves estimated at 570 million tones with additional than 65% Fe. Karnataka has the highest reserves of magnetite ore at 2784 million tones, followed by Andhra Pradesh and Goa. Because 1992, India’s iron ore production has grown consistently. In 1992, the total output was 55MT and 2003, it reached over 99.1MT even though in 2004 it has registered a growth of 22% with 120.6MT and an all time high of 141.247MT in 2005.
The annual production of iron ore in India is shared in between PSUs and private sector inside the ratio of 55% and 45% respectively. The production comes from as a lot of as 247 mines of which, 41 are owned by PSUs when 206 are with the private sector. Majority with the mines inside the PSUs are huge and mechanized even though within the private sector the mines are tiny and semi-mechanises or non-mechanised.
India’s production and export of iron ore has re-ordered phenomenal growth inside the last 10 years, where the production has taken extended leaps from 66.8 MT in 1995 to 74.9 MT and 120.6MT inside the year 2004, an boost of 12.1% from 1995 to 2000 and 61.0% from 2000 to 2004. Indian exports are directed mostly towards the Far East. Japan is traditionally probably the most critical client but has in recent years been replaced by China.
Production trends
Iron ore
World production of iron ore has grown by about 10% to reach 1198.2MT inside the year 2004. The boom extends to practically all important producing nations. China’s production has shot up from 122.7MT to 145.7MT in 2004 (an enhance of 18.7%), while Brazil accounts for 10% raise from 245.6MT to 270.5MT, and Australia registers 13.7% growth from 212.0MT to 241.0MT. Indian iron ore industry also has flourished with its relative proximity to the Chinese hot bed and has grown by 21.7%, from 99.1MT in 2003 to 120.6MT within the year 2004, securing itself the fourth location in iron ore production within the globe.
Pig iron
World pig iron production in 2003 was 657MT, indicating an enhance of 7- 8% compared to the prior year, 2002 (202MT), or 19.7%. India’s production of pig iron improved by 9.2% to 26.6MT though Brazil registered a rise of 8.1%, to 32MT.
Iron ore prices
The expanding demand for iron ore, triggered primarily by the incredibly rapid growth rate of China, has pushed the iron ore costs to greater levels than ever expected. On one hand, it is actually the booming Chinese demand: however it's the boost inside the raw material cost, mainly the coking coal, which elevated substantially.
The combination of value rise in each – iron ore too as coal has resulted in greater steel prices. India’s iron ore exports to China are primarily on spot basis.
Spot iron ore freight rates are getting an upward trend given that the year 2002; so a lot to ensure that in some instances, the freight expense additional than the iron ore itself; particularly on Brazil – China route. The distance from India to China is considerably shorter than the distance from Brazil to China; and the freight rates are 20% - 40% lower than the Brazil – China route.
This adds towards the competitiveness in the Indian exporters. The expense of Indian iron ore to Japan, inside the year 2005, has been fluctuating in between 60.20 to 70.60 US cents per 1% Fe/t.
The iron ore costs (in 2005) from Australia to Japan are between 58.02 and 78.77 US cents per 1% Fe/t whereas the price from Brazil to Japan shows fluctuations from 55.34 to 57.32 US cents per 1% Fe/t for exactly the same period.
The cost of pellets has been inside the order of 115.51 US cents per 1% Fe/t (Brazil to Europe); 120.66 US cents (Canada to Europe) although pellets from Sweden to Europe are accessible at a price of 128.00 US cents per 1% Fe/t.
Sea borne trade
Sea borne iron ore trade has been on the rise because the year 2002, when it was 481 MT with 7.8% raise it touched 518 MT in 2003 and 634 MT in 2004. These figures don't consist of trade lakes among Canada and USA.
The world crude steel production levels the globe sea borne iron ore trade has reached a new record degree of 634 MT in 2004. A marine route to East Asia, especially to China is having a key role in sea borne iron ore trade.
Australia could be the top exporter with 218MT, followed by Brazil with 201MT. Third place is occupied by India at 63MT, way ahead of South Africa and Canada that are both about 25MT. Shipments from Brazil and Australia combined make up roughly 65% of total iron ore exports. If shipments from India, Canada, South Africa and Sweden, that are the next 4 most significant exporters, are added, the share increases to 85%. If all exporters shipping by ocean vessels are included the figure grows to about 90%. Export by train, mainly in Eastern Europe and earstwhile USSR are of marginal global significance.
Amongst iron ore importers, China has surpassed Japan and taken the best spot as the leading importer. At 208MT it accounts for 32% of the total imports of the world! Japan’s imports in 2004 amounted to 134.9MT. China, Japan plus the Republic of Korea put together accounts for 60% from the total imports from the world.
Conclusion
While the globe iron ore marketplace is booming, it really is regrettable to note that the environmental activism has taken a negative course and practically blocked the production from the largest producer of iron ore in the country, the Kudremukh iron ore mine which is now on crossroads with hanging uncertainties about future.
While the country’s mineral policy has a provision in its objectives, “to reduce adverse effect of mineral development on the forest, atmosphere, and ecology by means of appropriate protective measures,” the NGOs inside the bigger interest with the nation ought to be concerned about sustaining the ecological balance and not inside the closure in the project that has carried out exemplary perform in the field of environmental protection / ecological balance and earned wealthy dividends for the nation via dedicated and relentless efforts raising extra than 2000 million US dollars worth of foreign exchange in the country.