Iron ore miners want the government to withdraw the 30 per cent export duty on ore and removal of differential railway freight charged on ore meant for exports.
Recently, Prime Minister Manmohan Singh said the government would do the needful to smoothen iron ore export to boost overall exports and bring down the current account deficit (CAD).
But steel companies don't want the government to relax restriction on export of iron ore as such a move would reduce supply of the key raw material to their plants.
Steel firms are already facing shortage of iron ore and there is not enough production of ore in the country, said Seshagiri Rao, Joint Managing Director and group Chief Financial Officer of JSW Steel.
Due to shortage of ore, most steel companies are working at lower capacities. “Last year, the entire steel industry produced only 72 million tonne as against a capacity of 100 million tonne when the country produced 140 million tonne of iron ore.
The Federation of Indian Mineral Industries estimates ore production at 100-110 million tonne for 2013-14, an all-time low in recent years and a decline of about 25 per cent over the last financial year. In 2012-13, India produced 140 million tonnes of the ore.