Country's mining industry has been "adversely affected" due to drop in iron ore prices in the international market, Parliament was informed today.
"Yes Madam. The mining industry in the country has recently been adversely affected due to decline in iron ore prices in international market," Minister of State for Mines and Steel Vishnu Deo Sai said in a written reply to Lok Sabha.
Iron ore is the main ingredient in the production of steel.
After detailed deliberations in the inter-ministerial meeting and inter alia in view of the continuous fall in the prices of iron ore globally, the government has fully exempting export duty on iron ore lumps and iron ore fines (below 58 percent Fe content) with effect from March 1, 2016, he said.
World's largest steelmaker ArcelorMittal had said last month that it expects iron and steel prices to remain under pressure through out this calendar year.
The steel and iron ore prices have been under pressure in recent periods and particularly in 2015, with both reaching "historical lows in 2015," the firm had said.
On outlook for 2016, the firm had said: "Management currently considers it likely that while stabilisation is possible, steel prices will remain on the low side at least through 2016, given expectations regarding economic conditions and demand.
"Management expects iron ore prices to continue to remain under pressure in 2016 due to the supply/demand dynamics...," it said.
Steel and iron ore prices are sensitive to trends in cyclical industries, such as the automotive, construction, appliance, machinery, equipment and transportation industries, which are significant markets for ArcelorMittal's products, the Luxembourg-based firm had said in a regulatory filing.
Explaining volatility in iron ore prices, ArcelorMittal had said spot prices of the ore fluctuated between a peak of USD 160 per tonne (Platts index, CFR China, 62 percent Fe) in mid-February to USD 110 a tonne at the end of May in 2013.
It culminated in a historical low of USD 44.50 per tonne in early July 2015 then recovered to USD 59.25 a tonne at the beginning of September 2015, before demonstrating further volatility and surpassing the historical low at the end of December 2015 at USD 38.50 per tonne, it had added.
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