Faced with the government’s emphasis on mineral processing within the country and mine allocations restricted to actual users, smaller iron ore mining companies have started looking for alternative destinations, including Philippines, Thailand and Indonesia.
Goa-based H L Nathurmal & Co has applied for 20,000 hectares of mine area in the Philippines, in response to the local government’s invitation to Indian companies. According to Haresh Melwani, CEO, the Philippine government has already approved in principle and a formal okay is awaited. The company has applied for a similar mine area in both Thailand and Indonesia.
Part of the draw is to mine for exports to the Chinese market, where the demand for the steelmaking raw material is very high. According to Melwani, VS Dempo and a couple of other companies are already there. Others like Viraj Profiles have also evinced interest to own a mine either independently or in collaboration with local partners, to mine and export iron ore to Chinese companies.
Efforts to reach representatives of V S Dempo and Viraj Profiles yielded no result. Melwani said many small and mid-size miners had approached the governments of Philippines, Thailand and Indonesia, to meet export commitments to their clients in China.
NOT MEGA PLAYERS
Large steel companies, which have also been scouting for raw material security abroad, for both iron ore and coking coal, have not evinced interest in seeking leases in these countries. “The average mine size in these countries is very small and, hence, does not fit the economics of our size. Therefore, we are not interested in either forging a tie-up with local players or carrying out mining activities there independently,” said a spokesperson of a leading Mumbai-based steel producer.
Since the Karnataka government banned iron ore exports, mining in the state has reduced dramatically, as local mills have not lifted iron ore fines (which are 70 per cent of the mined ore, the rest coming in the form of lumps). Local steel mills are interested only in lumps. So, mines in Karnataka kept piling up fines. Consequently, miners have no option but to reduce output, said Melwani.
“We want local miners to invest in benefication projects, which is the need of the hour,” said Sunil Bharadwaj, deputy secretary in the Union steel ministry, on the sidelines of the opening ceremony of Asian Metallurgy, a three-day seminar-cum-exhibition here.
“Indian iron ore miners are facing several restrictions and, hence, it is logical to go abroad to carry out their business,” said Glenn Kalavampara, secretary, The Goa Mineral Ore Exporters Association. He forecast an 80-90 per cent decline in exports this monsoon season. Early last month, half of Goa’s iron ore output, involving 62 mining companies, faced closure due to lack of valid environment clearances. The Public Accounts Committee of the Goa legislative assembly has already ordered closure of 15, while the remaining 47 are on its radar for similar orders.
