New Delhi: Exports of high-grade, if not all, iron ore should be slashed —preferably banned altogether—in order to preserve the “scarcely available national asset" and boost the domestic steel industry, the standing committee on coal and steel said in a policy review.

The committee, in its review of iron ore export policy tabled in Parliament on Thursday, urged the government to take immediate measures to ban the export of high grade iron ore (with more than 64% iron content) and “if possible ... total banning of export of iron ore."

The committee headed by Kalyan Banerjee, a Lok Sabha member from the Trinamool Congress, virtually questions the rationale for exports, quoting the Planning Commission as saying “large scale exports of iron ore have raised serious concerns about future availability".

The report comes just when finance minister P. Chidambaram is trying hard to curtail a current account deficit of $87.8 billion by boosting mineral exports among other measures. Speaking in Parliament, Chidambaram expressed unease about the fact that vast resources of iron ore are lying unexploited due to a ban imposed by the Supreme Court at a time when the country desperately needed forex.

The apex court has imposed a blanket ban on iron ore mining in Goa and a partial ban in Karnataka. It has left the decision on one iron ore mine in Orissa on the Union government.

The report also recommended that all upcoming steel plants and expansion of existing steel plants should be based on technologies that can use low grade iron ore (fines). It expressed dismay that out of the 200 crore allocated by the 12th Plan, nothing was spent on promoting technologies that convert fines into pellets with high iron content.

Indian steel plants need high-grade ore because the capacity to process low-quality ore is still in a nascent stage.

Incidentally, the basic argument of the commerce and mines ministries to reduce export duty on iron ore is that “not all types of iron ore are suitable for processing in India". The steel ministry has opposed this proposal.

Rather than taking the easier route of exports, the committee asked the ministry of steel to take immediate steps to create pelletization facilities so that lower quality ore can be fully used by domestic steel plants.

Noting that the iron ore requirement in 2016-17 is likely to be 206 million tonnes— 1.5 times the present consumption—it asked the steel ministry to draft a new steel policy and an action plan for exploring untapped potential sources of iron ore.