India, a country vastly rich in mineral resources, has ironically started to import iron ore, the key ingredient to steel making, the newspaper Economic Times reported.
An employee works at a workshop in Hanyang Iron and Steel factory in Wuhan, Hubei province March 8, 2010.
The paper said a Vale SA vessel made a call at Paradip Port, located at India's Odisha province, the country's biggest producer and exporter of iron ore.
But the Vale SA vessel was not there to get iron ore from India. It was there to deliver iron ore to India.
"Selling iron to Odisha is akin to selling ice to Eskimos. Iron-ore imports on the eastern coast were unheard of yet," the Economic Times quoted as saying a head executive working for one of the world's largest miners. Suffice to say, the Vale SA source precisely knew what he or she was saying. The person was an Indian.
Though India may not turn into a net iron ore importer, still, the hurdles its steel mining companies face leave them no choice but to source the ingredient overseas.
"We are foreseeing a couple of years when India would be importing iron ore - it may not necessarily become a net importer though," said Prakash Duvvuri, an analyst from a New Delhi-based mining consultancy firm.
India is now facing diminishing iron ore inventories, attributed mostly to the government's massive crackdown on illegal mining activities.
Though iron ore imports are still recognisable by the numbers, observers and analysts say this could increase and make India overly dependent on overseas mineral resources which it has so abundantly on its own.
The iron ore Vale SA delivered to the Odisha port is meant for Bhushan Power & Steel's plant in the eastern state. Moreover, Bhushan Power & Steel admitted it is sourcing and buying iron ore pellets from Bahrain and Ukraine.
"The shortage of iron ore supplies in Odisha has forced us to import," Sanjay Singhal, owner of Bhushan Power & Steel, was quoted as saying. The company is currently constructing a 2.3-million tonne capacity steel plant in Odisha.
Another Indian steelmaker, Essar Steel, has also been reported importing ore for the past few months.
Paradip Port officials as well as Indian shipping industry sources told the paper the port is expected to receive another 150,000 tonnes of ore imports. They did not detail the name of the buyer.
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