KOLKATA (miningweekly.com) – A slump in international prices, an absence of buyers and high carryover stocks have cast a pall of gloom over the new mining season in the western Indian province of Goa. So much so, that no miner in Goa have resumed operations even though a new mining season officially started on October 1 – the end of the monsoon season.

Several miners and Goa government officials have said that lease holders have not started mining operations and that no premining preparations, including appointing contract workers, have been completed in the region.

The official stated reason for not starting operations was the delayed retreat of the monsoon season and continued sporadic rainfall across Goa, but in reality, the dismal business environment is forcing miners to delay operations to avoid the risk of stockpiles at pitheads.

Mining operations in Goa shut down in June every year with the onset of the monsoon rains and resumes on October 1, as the rains abate.

With international prices of high-grade iron-ore fines (FE content 63.5% and above) falling to about $63/t to $65/t CFR China, there are no buyers for low grade iron-ore fines (FE content 58% and lower), which is the primary grade extracted across Goa mines.

According to at least two miners, low grade iron-ore fine prices have crashed to about $45/t CFR China, and there are no buyers for Goa production. Even those Chinese mills that are sourcing low-grade fines are preferring to conclude transactions in Australia, rather than Goa.

In fact, according to industry estimates, iron-ore export volume shipment from Goa since April 2017, was close to nil.

At the current international price for low grade iron-ore fines and with almost 40% of total export realisations payable towards various taxes and levies, miners fear a negative return from export shipments if production is to resume, the miners add.

The situation is also causing concern for the Goa government with an official suggesting that a lack of export shipments and buyers for low grade fines resulting in unsold stocks lying across stockyards in the region will add renewed pressures on prices if production is to start now.

The Goa government has been able to e-auction about 11.2-million tons of low grade iron-ore stocks against a total volume of 15.5-million tons of low-grade ore available during the previous mining season of October 2016 to June 2017.