Decline in iron ore shipments on duty hike has not only impacted miners, but also left Shipping Corporation of India (SCI) worried about the prospect of its bulk segment which contributes nearly 70% to its turnover.
"If iron ore trade is reduced, what will I take out from India? I am committed to bring coal to India for Coal India and SAIL. If iron ore is not available to be taken out, then what do I do?" SCI Director (Bulk Carrier & Tanker Division) Sunil Thapar told reporters here.
"That's why I am a bit worried abut reduction of iron ore export. This is an worrying factor for me," he added.
Since March, duties on fines and lumps exports have been raised to 20% from 5% and 15%, respectively with the intention of more value-addition within the country.
The move has greatly impacted exports of the raw material as the country's major ports reported around 13% dip in shipments of iron ore in 2010-11 to 87.3 million tonne against 100.33 million tonne a year ago. Most of India's iron ore goes to China.
The duty hike impacted SCI's revenue from bulk segment which could generate only Rs 3.36 crore net profit in the final quarter of last fiscal against Rs 133 crore net profit in the corresponding quarter last fiscal.
SCI's problem will be compounded when the state-run firm adds 17 vessels, which includes 13 dry bulk and four offshore vessels, to its fleet of 79 this year.
"China is an important factor for us. If we can't export to China, then I have to operate from ports other than India. If I am doing cross trading, then I am not doing the job of a national carrier," Thapar said.
SCI carried around 2% of India's total outbound iron ore shipments last year.
To a question, Thapar said that SCI is currently carrying out "some" due diligence for venturing into the shipyard area.
"Some due diligence process is going on. It is at a very preliminary stage. The Ministry has asked to look at the area. We will have some equity participation in a yard in the East or East coast of the country. Nothing has been decided," Thapar said.
