Rebuffing Indian steel exporters' demand for not imposing a ban on the exports of the raw material, the Associated Chambers of Commerce and Industry of India (ASSOCHAM) has urged the government to completely ban exports of iron ore having more than 60 percent iron content in it.

According to the ASSOCHAM, the private iron ore miners, making a windfall profit by exporting iron ore, have created a myth that iron ore fines are in excess in India as the Indian steel industry is not equipped to use the same.

"However, it is a total distortion of facts as most of the integrated steel plants using sinter and pellets use iron ore fines extensively which results in increased efficiency of iron making process," the chamber said in a statement.

Interestingly, recently Mines Minister B. K. Handique had also viewed that with absence of technology to use iron ore fines, India's ban on iron ore exports would not only render thousands jobless but also lead to air pollution in and around the mining areas.

In contrast, the Steel Ministry has been lobbying for completely banning export of iron ore, arguing that the mineral is a non-renewable resource like coal and petroleum products, and should be preserved.

India produces over 200 million tonnes of iron ore per year. About 50 percent of the iron ore produced in the country is exported and and fines constitute 85 percent of exports.

The 72-million-tonne capacity Indian steel industry mainly consumes lumps, as it lacks the expensive finex technology required to refine the fines on the lines of China, a major steel producer which consumes a large quantity of Indian fines.

According to the chamber, China, the largest importer of Indian iron ore, has been increasing export tax on commodities like coal, coke and steel products to conserve its raw material.

Therefore, ASSOCHAM suggested that in case if a complete ban on exports of iron ore with more than 60 percent iron content is not possible, India should at least follow similar practices.

It also said a 40 percent resource rent tax across the mining sectors be imposed to check the windfall profits made by iron ore miners.