Another Indian state seeks iron ore export ban

By Sujeet Kumar & Siddesh Mayenkar
RAIPUR/MUMBAI, Feb 18 (Reuters) - India's central Chhattisgarh state is looking at banning iron ore exports, a move that could further tighten supply of the steelmaking material and push prices even higher.
Chhattisgarh joins the Orissa state in seeking a ban on exports by state-run miners.
The southern Karnataka state, which accounts for a quarter of India's annual exports of around 100 million tonnes, has banned exports since July last year, restricting supply from the world's No. 3 iron ore exporter.
Chhattisgarh Chief Minister Raman Singh told Reuters on Friday he was "strongly in favour of putting an immediate ban" on iron ore exports from the state and had informed Prime Minister Manmohan Singh about it, saying the state wanted the supplies for domestic use to boost jobs.
A ban on exports was one of Raman Singh's election promises in 2003, but this is the first time he has formally sought a ban. State-run NMDC (NMDC.BO) is the only iron ore miner in Chhattisgarh and any ban must come from the federal government.
"A lot of the upside in prices is largely due to restriction on iron ore coming out of India and this news can only accentuate this," said Mark Pervan, senior commodity analyst at ANZ Bank in Melbourne.
"It's a bad time of the year to be talking about banning material out of India when you've got Australian iron ore also restricted by the cyclone season."
Iron ore prices have risen around 13 percent this year, adding to gains of more than 40 percent in 2010.
"There is no justification for the ban. In fact most of the iron ore from Chhattisgarh is used by local steel mills, and very less quantity gets exported from here," said David Pichamuthu, head of Federation of Indian Mineral Industries' southern region based in Bangalore.
He sees only a "slight impact on prices".
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