Indian government looking at lifting iron ore mining ban; exports down 70 percent

India's ministry of mines is pushing the government to lift the ban on iron ore mining in key states. Over the past year exports of the steel-making ingredient have dropped by more than 70%, Business Standard reports.

The ministry will file an affidavit with the Supreme Court within the next two weeks in support of its argument that the ban has impacted the overall economy, employment and revenue generation at the state and national level. A hearing will be held in mid-September, Business Insider writes.

India is struggling to hold on to its title of third largest iron ore exporter, though it will likely become a net importer of the commodity this year. Exports have been shrinking since 2010 when they reached record highs of 117 million tonnes. Shipments in 2012 reached 61.7 million tonnes.

The ban came in response to illegal mining operations which were allegedly causing environmental damage.

In April this year the industry saw some relief when the government partially lifted the ban on 63 mines in Karnataka. However, operations will take up to two years to recover as they work on meeting environmental standards.

According to data obtained by Business Standard from the Federation of Indian Mineral Industries, the ban on mining in Goa and Karnataka has cost the country $10 billion. Forecasts for this year put exports of iron ore at 18 million tonnes.

Recently India's Finance Minister, P Chidambaram, said the government was eager to start up the iron ore mining sector again. Chidambaram is worried about the country's current account deficit – the third highest in the world and growing from oil and gold imports.

There may also be some other form of relief: Earlier this week Reuters reported that the country was looking at cutting taxes from 30% to 20% on iron ore exports. The measure could potentially double shipments.