APSTC starts mineral exports with iron ore

In a quest to expand its business activity to newer areas, the Andhra Pradesh State Trading Corporation (APSTC) has started iron ore exports with an initial shipment of 42,000 tonnes of iron ore lumps to China. The first ship carrying the Rs 13-crore cargo left the Chennai port on Saturday.

This is for the first time that APSTC had taken up mineral exports though it has been in the export-import business for the past several years. Traditionally the corporation deals with the export of agricultural products like red chillies, poultry products like eggs beside mango exports.

APSTC had procured the iron ore lumps from small and marginal mine owners at Sandoor, Kariganoor and Yashwanthnagar in Bellary district of Karnataka and transported the mineral in railway rakes to the Chennai port.

The corporation had also got permission from the Karnataka government's Mysore Minerals Limited to carry out mining and procurement of 50,000 tonnes of iron ore fines (powder form) at Sandoor mines near Hospet.

APSTC also plans to export iron ore fines to China from both Mangalore and Vizag ports. The iron ore being exported by STC is graded with 63.9 per cent of iron content.

Speaking to Business Standard, K Chandramouli, managing director of APSTC, said that the corporation was keen to take up more such activities in coming days while continuing with its traditional business activity, since the mineral export business is expected to give more dividends to the organisation. APSTC is also planning to export manganese ore to different destinations, he disclosed.

"We are aware of the fact that the export market is very volatile and the current bubble is not going to last for ever. But we hope to make use of the favourable conditions on account of heavy demand from China in a quick manner," the STC managing director said. "STC staff had efficiently overcome the logistic problems which helped the shipment possible in time," he added.

Being in a disadvantageous position as a state government agency, APSTC has still managed to overcome the tough competition from the private iron ore exporters in Karnataka.

APSTC's entry into iron ore procurement has also benefited the small and marginal mine owners in and around Hospet as the corporation has paid 20-30 per cent more than the price offered by private exporters. It is learnt that the per tonne procurement price in Karnataka mines is ruling between Rs 1,050 to Rs 1,200, depending on the quality and the availability of the ore.

With the iron ore shipment, the export turnover of the corporation for 2003-04 has touched Rs 14.76 crore, when compared to Rs 13.38 crore in 2002-04. It had done Rs 3.35 crore worth import business in the same period.