The massive demand for iron ore by Indian steel mills has encouraged the Rio Tinto Group, the world's third-biggest mining company, to consider earlier plans of setting up an iron ore mine in the country.

Bloomberg News reported the miner recently moved on with its study of either acquiring or building its own iron ore mine in the Asian country.

"We will be the first global miner directly participating in India's mining sector," Alan Davies, president of international operations for Rio's iron ore unit, was quoted as saying.

But such development is still subject to necessary board approval, Davies pointed out.

India, a vastly mineral resource rich country, due to strict government mining regulations involving environmental concerns, have put on hold several mining projects, which in turn have forced its steel makers to import iron ore from overseas.

Davies also noted the rapid urbanization and civilization of India, along with China and other emerging economies will further push global demand for the steelmaking raw ingredient.

The world's population growth will see the urbanization rate jump, he said, noting some 3 billion people around the world will get urbanized between 2010 and 2050.

To support this tremendous growth, iron ore miners would need to complement supplying demands of at least 100 million metric tonnes a year.

Rio Tinto said it projects to supply 25 per cent of the global iron ore forecast demand, where 500 million metric tonnes will be used to support growth, and 200 million metric tonnes to substitute high cost iron ore production from those seen to shut down.

Rio Tinto said the proposed Indian iron ore mine could operate on an initial 3 million metric tonne production of the key steelmaking ingredient, then increase to 20 million metric tonnes annually.

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India's Steel Companies Start Importing Iron Ore - Report