The country's cost may be between $2 and $4 per tonne or even less and thus the private sector is now getting into iron ore mining in a big way. NMDC is the largest producer of high grade and super high grade iron ore in India and the gas based DRI/HBI producers have been its largest buyers. To meet their demand, the corporation has curtailed its export of high grade Bailadila ore from around 5 million tonnes to around 2.5 million tonnes.

The country produces around 60 million tonnes of iron ore, half of which is being exported. Around 15 million tonnes of ore is exported from Goa where the private sector is the only player. In the Bellary-Hospet area also, private sector dominates, but most of the ore is exported through MMTC which facilitates exports. Bellary-Hospet area is also seeing increased private sector activity with Jindals teaming up with Mysore Minerals for a 3 million tonne iron ore mining project.

There are others also like Minerals Sales Private Limited who are big producers and exporters and who have been granted permission to export directly. The Goan mine owners, like Sesa Goa, Chowgules and Salgaonkars are also getting into mining activities in Karnataka, as they would like to blend the high grade Karnataka ores with low grade Goan ores. Lot of investment, particularly from Japan is likely to come into operation in iron ore mining in Karnataka.

There is also increased private sector investment in iron ore mining in Redi area of Maharashtra which is becoming a centre for good quality iron ore for steel and pig iron making. Some of the Goan mine owners also have plans to move into Redi. Orissa is also likely to become a big operator in iron ore in the private or joint sector.

The most ambitious project is that of Rio Tinto and Orissa Mining Corporation, which if it comes into being will produce between 10 to 20 million tonnes of iron ore for export. Usha Ispat has started mining activity in Orissa along with Orissa Mineral Development Corporation and produces around 1.5 million tones of high grade iron ore. AV Birla group is also in mining through Essel Mining for supply of high grade ores to the sponge iron industry.

There are promising areas for mining and for putting up sponge iron plants or pellet plants in many iron ore bearing areas where private sector will have scope to show its expertise. Ispat has got part of the Bailadila iron reserves of NMDC where it can start a big mining project.

Therefore the private sector in India has enough scope to expand into iron ore mining even they choose to go along with state mining outfits to make their tasks easier. Jindals, Usha as well as Rio Tinto have opted for joint sector route where one party is a state enterprise.

NMDC has survived bad days and big losses thanks to state support but today in 1999-2000 it had sales of Rs 835.4 crores with a profit before tax of Rs 206.6 crores. It is planning for a production of 6.93 million tonnes of lumpy ore and 7.36 million tonnes of fines during 2000-01. It's production during 1999-2000 was 7.4 million tonnes of lumps and 6.25 million tonnes of fines.

NMDC plans to export 3.40 million tonnes of lumpy ore and 3.10 million tonnes of fines during 2000-01. It has ambitious plans to raise its total production of iron ore to 23.45 million tones from the present around 15 million tones by 2003-04. The entire expansion will be financed through internal accruals. So preserving NMDC as a state enterprise makes lot of economic sense, though it may not be welcome to the privatisers.