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"Last year, we had exported 400,000 tons. In 2012-13, I think it will be around 330,000 tons," said P K Das, MMTC chief general manager.
Chrome ore is used to make stainless steel after it is upgraded to ferrochrome.India sends most of its shipments to China, the largest stainless steel and steel producer in the world.
Lately, however, the government has taken steps to preserve chrome ore for domestic use by raising the export duty on chrome ore to 30 per cent this April from a flat 3,000 rupees (54.5 U.S. dollars) per ton earlier.
"While it is true the volume has come down due to imposition of higher export duty, poor demand from China has also affected exports. Producers are not really interested to sell chrome ore or concentrate," said Das.
The stiff rise in export duty is expected to encourage value addition of the mineral within India, as seen in the case of iron ore fines. Recently, there was a rush of investors to produce pellets from iron ore fines, after the export duty on it was raised to 30 per cent.
"For iron ore pellets, the demand is expected to rise in future because of upcoming steel plants. But the same is not the case for ferrochrome produced from chrome ore, as there are not many stainless steel players in the country to fuel ferrochrome demand," said Das.
Recently, after the duty rise, India's top private steel producer, Tata Steel entered into an agreement with another steel producer Haldia Steel for conversion of chrome ore into ferrochrome.
Some other deals for chrome ore conversion are underway, trade sources said. But, MMTC said, exports were inevitable despite value addition in the domestic market.
"India cannot consume all the chrome ore mined in the country for ferrochrome making, as a huge amount of electricity is needed for the conversion, which is very expensive. We have to export the material," explained Das.
Nearly all of India's chrome ore is produced in India's eastern state of Odisha,with Odisha Mining Corporation having control over a third of the output.
A few companies such as Tata Steel, Indian Metal and Ferro Alloys, FACOR and Balasore Alloys have captive mines in the state. They do not export chrome ore in line with the government order, and sell only ferrochrome.
Because of weak demand, the export price of the mineral fell by 10 U.S. dollars per ton to 270 U.S. dollars per ton in the quarter ending September. MMTC said the rates might stay at similar levels in the next quarter, too, as it would be difficult to sell the mineral at tighter margins.
Chrome deposits in India are less than one per cent of the world's known resources, as against 71 per cent in South Africa, 19 per cent in Zimbabwe and seven per cent in Kazakhstan.
The prices are likely to be under pressure as Zimbabwe proposes to lift its ban on export within a month. However, MMTC said Indian ore would be always sold at a premium, due to its higher quality.