Steel producers are worried that the earlier plan of the Railways to hike the classification of iron ore for domestic movement from 170 to 180 will come into force any day. The change in classification will increase the rail freight by about six per cent.

 

On October 6, the Railways, in a notification, announced that the iron ore classification for domestic movement would be revised upward from 170 to 180 from October 13. However, a subsequent notification on October 10, stated that the decision had been kept in abeyance for one month. That one month having expired, the steel producers are worried that the October 6 decision on higher classification will come into force any moment.

 

What has been upsetting for steel producers is that the rail freight on iron ore for domestic movement is being hiked at a time when the Railways is going out of the way to grant rail freight concessions for iron ore movement for exports.

 

In fact, the recent announcements on rail freight concessions on iron ore exports will particularly benefit the mine-owners loading the ore in mines served by South Eastern Railway. The exports from the mines served by East Coast Railway (except those served by the Kottavalsa-Kirandul line of ECoR) will not benefit much.

 

It might be noted that the Railways has been tinkering with iron ore classification for domestic movement for quite some time. On April 1, 2007, the classification was 160, revised upward to 170 on January 7, 2008, further revised upward to 180 on April 1, again revised downward to 170 on May 1, again revised upward to 180 on October 6, but kept in abeyance till November 12.

 

The total rail-borne traffic, both inward and outward, of various steel plants under Steel Authority of India Ltd is more than 60 million tonnes and that for Tata Steel’s Jamshedpur plant about 22-23 million tonnes annually. –Business Line