Mahesh Kulkarni / Bangalore Sep 25, 2012,
Business Standard
The recent move by the Goa government to ban iron ore mining is likely to hit the production of the mineral in the country during the current financial year. The domestic production is likely to touch 140 million tonnes (mt) in 2012-13, an 18 per cent decline year-on-year. A similar production level was seen earlier during 2004-05. It had peaked in 2009-10 to 220 mt.
For the financial year ended March, the domestic production of iron ore was estimated at 170 mt, a decline of 20 per cent year-on-year. The country exported 60 mt in FY12, down 39 per cent year-on-year. The production is likely to be affected due to the ban and slower MoEF clearances. After Karnataka and Goa, the ban might be extended by other states as well, a Citi Research report said.
“We expect domestic steel production to grow at about eight per cent CAGR between FY05 and FY13 to 78 mt. Domestic ore should suffice to meet India’s requirements (about 125 mt). But exports could potentially decline from 60 mt in FY12 (35 per cent of total production) to less than 30 mt in FY13 if the mining ban in Goa stays,” analysts from Citi Research said.
The recent mining ban announced in Goa could wipe out about 30 mt from the seaborne market (about one billion tonnes), partly offset the impact of about 50 mt of new supply expected to come on-stream globally in second half of 2012 calendar year and provide near-term support to global prices.
India’s share in the seaborne market could decline from 13 per cent in FY10 to around 3 per cent in FY13. An increase thereafter would depend on the fate of the Goa mining industry.
The government of Goa suspended mining after the Shah Commission Report was tabled in Parliament on September 12. This was followed by the suspension of environment clearances for all 93 mining leases by the ministry of environment and forests. The ban in Goa follows a blanket ban imposed by the Supreme Court (SC) in Karnataka in August 2011.
It is unclear how long the process of obtaining fresh environment clearances is likely to take. If exports out of Goa are not resumed this year, India’s total exports in FY13 could drop to about 30 mt (12 mt in Q1FY13).
However, the suspension of mining operations will not affect trade and transportation of ore already mined and existing in the lease hold area, in transit or stocked at the port.
The SC had recently allowed resumption of mining in 18 Category A mines in Karnataka. Goa and Karnataka together accounted for about 36 per cent of India’s production and about 65 per cent of India’s exports prior to the ban.
The government of Odisha is also planning to e-auction iron ore from next year (as is being done in Karnataka) to bring more transparency. The state government has constituted a five-member panel headed by principal secretary of steel and mines department to work out the modalities.
India’s iron ore reserves are estimated at 7 billion tonnes. Most of India’s iron ore production (over 95 per cent) is in the states of Odisha, Karnataka, Chhattisgarh, Goa and Jharkhand. Public sector companies like NMDC and SAIL produce 25-30 per cent of India’s output. The balance is from the private sector including companies such as Tata Steel.
Iron ore fines account for 55-60 per cent of India’s iron ore production and the balance is in the form of lumps. The domestic industry consumes around 90 per cent of the lumps produced and a large proportion of fines are exported. Of the total iron ore produced (in FY10), about 25 per cent is greater than 65 per cent Fe grade, 46 per cent is between 62-65 per cent Fe and the balance 29 per cent less than 62 per cent.
Business Standard
The recent move by the Goa government to ban iron ore mining is likely to hit the production of the mineral in the country during the current financial year. The domestic production is likely to touch 140 million tonnes (mt) in 2012-13, an 18 per cent decline year-on-year. A similar production level was seen earlier during 2004-05. It had peaked in 2009-10 to 220 mt.
For the financial year ended March, the domestic production of iron ore was estimated at 170 mt, a decline of 20 per cent year-on-year. The country exported 60 mt in FY12, down 39 per cent year-on-year. The production is likely to be affected due to the ban and slower MoEF clearances. After Karnataka and Goa, the ban might be extended by other states as well, a Citi Research report said.
“We expect domestic steel production to grow at about eight per cent CAGR between FY05 and FY13 to 78 mt. Domestic ore should suffice to meet India’s requirements (about 125 mt). But exports could potentially decline from 60 mt in FY12 (35 per cent of total production) to less than 30 mt in FY13 if the mining ban in Goa stays,” analysts from Citi Research said.
The recent mining ban announced in Goa could wipe out about 30 mt from the seaborne market (about one billion tonnes), partly offset the impact of about 50 mt of new supply expected to come on-stream globally in second half of 2012 calendar year and provide near-term support to global prices.
India’s share in the seaborne market could decline from 13 per cent in FY10 to around 3 per cent in FY13. An increase thereafter would depend on the fate of the Goa mining industry.
The government of Goa suspended mining after the Shah Commission Report was tabled in Parliament on September 12. This was followed by the suspension of environment clearances for all 93 mining leases by the ministry of environment and forests. The ban in Goa follows a blanket ban imposed by the Supreme Court (SC) in Karnataka in August 2011.
It is unclear how long the process of obtaining fresh environment clearances is likely to take. If exports out of Goa are not resumed this year, India’s total exports in FY13 could drop to about 30 mt (12 mt in Q1FY13).
However, the suspension of mining operations will not affect trade and transportation of ore already mined and existing in the lease hold area, in transit or stocked at the port.
The SC had recently allowed resumption of mining in 18 Category A mines in Karnataka. Goa and Karnataka together accounted for about 36 per cent of India’s production and about 65 per cent of India’s exports prior to the ban.
The government of Odisha is also planning to e-auction iron ore from next year (as is being done in Karnataka) to bring more transparency. The state government has constituted a five-member panel headed by principal secretary of steel and mines department to work out the modalities.
India’s iron ore reserves are estimated at 7 billion tonnes. Most of India’s iron ore production (over 95 per cent) is in the states of Odisha, Karnataka, Chhattisgarh, Goa and Jharkhand. Public sector companies like NMDC and SAIL produce 25-30 per cent of India’s output. The balance is from the private sector including companies such as Tata Steel.
Iron ore fines account for 55-60 per cent of India’s iron ore production and the balance is in the form of lumps. The domestic industry consumes around 90 per cent of the lumps produced and a large proportion of fines are exported. Of the total iron ore produced (in FY10), about 25 per cent is greater than 65 per cent Fe grade, 46 per cent is between 62-65 per cent Fe and the balance 29 per cent less than 62 per cent.
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