With new govt in place, FIMI expects good days for mining industry.

NEW DELHI: Iron ore miners are pinning hopes on the new government for revival of the industry which is bogged down by a plethora of problems.

The industry is facing issues like high export duty, ban on production and expensive railway freight meant for exports which were alien to iron ore miners in the not-so-distant-past when India was among world's top players.

Hoping that the new government would strive to solve the nagging issues, the Federation of Indian Mineral Industries (FIMI) today said the "biggest change that has happened with the new government is the change of mindset".

Finance Minister Arun Jaitley in his Budget speech had observed "the current impasse in the mining sector, including iron ore mining, will be resolved expeditiously". However, he did not tweak export duty which is 30 per cent now.

Stating that new government is looking into issues with an open mind, FIMI President H C Daga said contribution of the mining sector to GDP has gone down to 1.4 per cent in FY 2014.

"It was thus strategically important to accelerate mining activity and take a view as to how and in what way, country's natural resources can be developed to optimal level for the growth of national economy." he said.

As many as 63,395 applications for reconnaissance permits, prospecting licences and mining leases are pending for state's approvals as on May 5. Lots of mining renewals are also pending, he said.

FIMI Secretary General R K Sharma said: "There has been a structural flaw in the thinking. We are importing raw material from overseas private miners, but not allowing private sector to play its role here."

India is now set to become a net importer of iron ore in the current fiscal compared to net exports of 117.37 million tonnes in 2009-10, he said, adding exports might come down to a single-digit to 9 MT in 2014-15 against 14.42 MT last fiscal.

Imports, led by major steel makers, are likely to go up to 15 MT this fiscal, he said. The office bearers of the miners' body said it would be difficult for India to regain its market share as other geographies have filled up the vaccum.

Source : economictimes.indiatimes.com