Ore miners go to Malaysia

The country's iron ore mining and exporting companies, which are feeling the heat of a Rs 300 a tonne export duty on iron ore, are now heading towards Malaysia in search of better prospects.

Malaysia, whose iron ore resources are largely unexplored, presents a good opportunity for the country's mining companies, owing to its geographical proximity to China, the principal consumer of iron ore. Apart from an Australian company, a few local companies are engaged in extracting iron ore in Malaysia. Indian companies are exploring joint venture options with them.

"Unlike India, there are no curbs on iron ore exports in Malaysia. Besides, the mining laws are flexible. The country has an excellent network of road, railway and port infrastructure. A container ship needs just seven days to reach China from Malaysia as against 15 days from India. Besides, Malaysian mining companies are looking for foreign investments," said Basant Poddar, managing director, Mineral Enterprises, which is in the process of entering Malaysia.

The Bangalore-based company, in association with another Karnataka-based mining company, Matha Minerals, has launched a joint venture "� Iron Stone Mining "� for its Malaysian foray. While the Rs 400 crore Mineral Enterprises will hold two-thirds equity in the company, the rest will be held by Matha Minerals. Both the companies are into iron ore mining and exporting from Karnataka. "We have tied up with a local Malaysian company, KSG Resources. At present, we are conducting resource exploration in the lease area and expect to hit upon sufficient deposits of iron ore (both high grade/medium grade). We intend to start mining in the next six months. Our initial investment will be around $5 million," Poddar said.

The company plans to produce 1.5 million tonnes of iron ore every year. "It will be scaled up gradually. The entire stock will be exported to China. We have secured contracts from Chinese steel mills," he added.

Another Indian company, SL Mining Industries, has applied for a mining lease in Malaysia.

"We are partnering a local company, which is already carrying out iron ore mining operations in Malaysia. We intend to further develop these mines," said SL Mining Industries Managing Director S K Lal.

According to Lal, many Indian iron ore trading companies are interested in Malaysia because of the price factor. "The export duty on iron ore is unlikely to be lifted for the time being. We cannot sustain business by absorbing the export duty. Malaysia could be an alternative choice for us to keep the contracts alive," he added.

India's iron ore miners, which are feeling the heat of a Rs 300 a tonne export duty, are now heading towards Malaysia in search of better prospects.

Malaysia, whose iron ore resources are largely unexplored, presents a good opportunity to Indian miners, owing to its geographical proximity to China

Apart from an Australian company, a few local companies are engaged in extracting iron ore in Malaysia and Indian companies are exploring joint venture options with them

Unlike India, there are no curbs on iron ore exports in Malaysia. Besides, the mining laws are flexible.