Why is it in the news?
- The Competition Commission of India (CCI) has undertaken a comprehensive study to assess the competitive landscape within the iron ore market.
More about the news
- Iron ore, primarily composed of magnetite and hematite, constitutes a significant portion of India’s mineral wealth.
- The study reveals that India contributes 7% of the global iron ore production, positioning it as the world’s 4th largest producer.
- India demonstrates a commendable level of self-sufficiency in iron ore production, a crucial raw material for various industries, particularly the steel sector.
- Despite India’s dominance in iron ore production, there has been a notable increase in iron ore exports. The concern stems from the fact that iron ore, in its raw state, has relatively low market value compared to finished products like steel.
- The study highlights the allocation of captive mines (mines owned by companies for self-use) to specific players as a factor creating entry barriers in the industry.
- The Mines and Minerals (Development and Regulation) Amendment Act, 2021, has introduced changes allowing companies with captive mines to sell up to 50% of surplus iron ore in the open market.
- The study expresses concern over the differential pricing of iron ore for different end-users, which could potentially lead to anti-competitive practices in the market.
- CCI’s key recommendation is to discourage the export of raw iron ore. The rationale is that iron ore is a non-renewable national resource, crucial for various domestic industries, and prioritizing export of higher value-added products like finished steel would align with the vision of a self-reliant India (Atmanirbhar Bharat).
- The study recommends the use of cutting-edge technologies to upgrade low-grade iron ore to higher grades which can potentially enhance its market value and contribute to the competitiveness of the Indian iron and steel sector.
- Encouraging the transformation of production processes into sustainable mineral production modes aligns with global trends and environmental considerations.