Iron ore exports from Goa declined over 60 per cent in 2010 due to a five-month ban on low grade ore imports by China steel mills.
According to Glenn Kalavampara, secretary of Goa Mineral Ore Exporters’ Association (GMOEA), shipment of Goa-origin ore declined to less than 28 million tonnes in 2010 as compared to 45 million tonnes in the previous year. Traders shipped around eight million tonnes of Karnataka origin ore last year which is estimated to plunge to less than half this year.
Haresh Melwani, CEO of H L Nathurmal & Co attributed the export decline to extended monsoon which halted ships at Goan ports until November, one month later than the previous years.
The Chinese government levied a ban on the import of iron ore with below 60 per cent of Fe content in April last year.
Though, the ban was restored in September, ore exports from India could not pick up proportionately due to Karnataka government’s ban on ore supplies outside the state boundary. During the ban period, however, many Goan miners had reduced excavation of iron ore to avoid unusual stocking and creating environmental hazard unnecessarily.
Last year, India exported nearly 117 million tonnes of iron ore largely low-grade ore with less than 60 per cent Fe content. But, overall exports are expected not to surpass even 90 million tonnes this year, said R K Sharma, secretary general of Federation of Indian Mineral Industries (Fimi).
Indian exporters ship nearly 90 per cent of overall exportable quantity mainly of low grade to China. But, reduction in Chinese offtake hampered overall supply of the steelmaking raw materials, said Kalavampara.
Karnataka, the largest producer of lumpy ore, suspended iron ore supply outside the state in July 2010 arguing that natural resources are to be preserved for processing within the state. Karnataka High Court in November last year upheld the state government’s decision while hearing a number of writ petition filed by individual miners. Now, the matter is scheduled for hearing on January 18 in the Supreme Court.
Meanwhile, Indian miners feel deprived of cashing on 30-month high iron ore prices.
“It is a lost opportunity for us especially when prices are rising phenomenally,” said Sharma.
“Iron ore miners are a victim of nasty politics in Karnataka,” said D V Pichamuthu, director, Fimi South, adding,“Technology available for converting low grade iron ore into high grade or processing ore with below 60 per cent of Fe content for value added products is not viable. Hence, miners should not be barred from exports.”
Iron ore prices in global markets are hovering around 30-month high of $172-175 a tonne. It is a boom time for Indian exporters as Australia, the world’s largest supplier, is reeling under severe flood which have drowned entire activities in the country’s largest mining hub Queensland. Another global supplier, Brazil, alone cannot meet China’s entire ore requirement.
An official from MSPL Ltd, one of India’s largest iron ore miners with nearly five million tonnes of ore excavating capacity in Karnataka, said, “Miners are suffering due to political rivalry in Karnataka.”
Meanwhile, for the week ended January 7, the imported iron ore stockpiles at China’s major ports were 73.92 million tonnes, up 0.7 million tonnes from last week; out of which Brazilian ore stockpiles comprised 18.35 million tonnes, down 50,000 tonnes, Australian ore inventory 27.50 million tonnes, up 540,000 tonnes and Indian ore stock 11.91 million tonnes, up 70,000 from that of last week, data compiled by Mysteel, the popular steel newsletter, showed.
China’s steel mills are currently in the process of replenishing inventory for kicking off its week-long Lunar New Year holiday from February 2 peacefully. Once, they come back from the leave, restocking will begin resulting into high demand of iron ore.
