Tuesday, 19 July,
Iron ore exports from India are likely to fall by more than a quarter to their lowest level in eight years because of higher export tariffs, mining bans and higher costs and infrastructural bottle necks. Iron ore sales from the world’s third-largest exporter are forecast to fall to 71.25 million tons in the current year to next March, from 95 million tons in the previous year.
Karnataka, which accounts for about a quarter of the country’s iron ore exports, banned shipments in July last year to curb illegal mining. In April, the Supreme Court ordered the state to resume shipments but, to date, exports have yet to resume with state officials citing technical problems, and now the Supreme Court is considering a blanket ban on mining activities in Hospet-Bellary region owing to environmental issues.
Indian iron ore export market is worth nearly USD 15bn and is a major source of forex for the Government of India also a major revenue generator for the Indian railways. The move to curb export and use iron ore will hurt both the government (inform or royalty income) and the Indian railways which will lose out on the very lucrative segment.
The other two major iron ore producers Orissa and Goa have problems of their own. Orissa is contemplating new mines and mineral policy to keep a tab on the amount of export and has also hardened its stance on illegal mining issue. On the other hand Goa does not have the required infrastructure to make up for the lost volumes as the roads are narrow and movement of trucks is restricted during the day time.
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