One million jobs affected by ban on iron ore mining, exports: ASSOCHAM

Sachin Manawaria | The Dollar Business   A ban on one of iron ore mining and exports in the top producing states of Karnataka and Goa has affected around one million jobs, according to a study conducted jointly by Yes Bank and the Associated Chambers of Commerce and Industry of India (ASSOCHAM). Illegal mining, lack of value-addition and shortage of iron ore for the domestic industry have led to several restrictions on the iron ore production and exports since 2010-11, including an export ban in top iron ore producing states of Karnataka and Goa. The government has also imposed an export duty of 30% ad valorem on iron ore with effect from December 30, 2011 and 5% ad valorem on iron ore pellets with effect from January 27, 2014. This along with the recent global meltdown has led to a sharp decline in production and export of iron ore, said the ASSOCHAM-Yes Bank study. India’s iron ore exports have declined from around 117 million tonnes in FY2009-10 to around 14 million tonnes in FY2013-14. This has led to a massive job loss in the mining sector, says the study.

Source - Ministry of Commerce, India

D.S. Rawat, Secretary General, ASSOCHAM, said, “Recent issues of illegal mining together with regulatory challenges, policy gridlocks, inadequate supporting infrastructure and others are significant hurdles in growth of India’s mining sector.” Lower iron ore production is also expected to adversely impact the overall economic growth in India. Rapid urbanisation coupled with growth in manufacturing sector is expected to boost the 9-11% growth in demand for various metals and minerals which is further expected to grow 4-5 times during next decade, said the study. ASSOCHAM said that the government must take progressive policy initiatives like single window clearance for greenfield and brownfield projects to encourage the private sector participation by enhancing domestic availability of major raw materials, improving financing avenues across mineral value chain and initiating steps to promote sustainable practices through larger community participation and responsible mining. Mining states have urged the government to remove export duty on iron ore to revive growth.  

This article was published on January 3, 2015.