Rejecting Karnataka government's plea, the Centre on Saturday ruled out the possibility of banning iron ore exports, saying such move would result in massive unemployment, revenue losses and social tensions.
Union commerce and industry minister Anand Sharma said Indian mines produced close to 230-235 million tonnes annually and the domestic consumption was 85-90 million tonnes, leaving an exportable surplus of over 140 million tonnes.
He said this surplus could not be stored because it was environmentally hazardous.Mr Sharma pointed out that mining was done in poor, backward areas of the country and the mining industry contributed substantially to the country's economy. "This industry employs tens of thousands, may be millions. If the export is stopped, it would lead to massive unemployment leading to social tensions", he said.
The minister questioned the Karnataka government's move to ban export of iron ore from 10 minor ports of the state. "I don't think that when you allow illegal mining.... Just stopping movement from minor ports is going to help", Sharma told reporters here.
Stressing that legal and illegal mining were different issues, he said: "It would be better for the government of Karnataka, for chief minister of Karnataka (B.S. Yeddyurappa) not to confuse the issue.
"They should check illegal mining. That's the real issue, that's the core", Mr Sharma said, adding, "those engaged in legal mining cannot be punished along with those who are into illegal mining."
He noted that what India exported primarily was the iron ore fines and not the lumps because the lumps were consumed by the domestic steel industry. Karnataka in recent weeks has repeatedly pleaded with the Centre to ban export of iron ore, to help curb illegal mining.