KOLKATA (miningweekly.com) - With the monsoon season ahead and the disincentives of low international prices, iron-ore mining operations in the western Indian coastal province of Goa are not expected to resume before October or November, at the earliest.

According to an official in the Goa Mineral Exporters’ Association (GMEA), if mining operations were to restart, production would have to be reduced within the next month or so with the onset of the monsoon rains.

Simultaneously, miners were not keen to resume operations as the cost of mining had increased to meet stricter mandatory environmental norms and these costs would not be covered by the current low international prices, he said.

According to Goa miners, export offers for benchmark high-grade iron-ore would need to move up by at least $15/t to $20/t from current levels, to ensure miners of sufficient margins from outward shipments.

A GMEA official said that even though current export offers for high grade iron-ore had bounced back to levels of $60/t cost and freight to China after falling to a recent low of $50/t, during April, the government increase in royalty payments and mandatory contributions towards the District Mineral Fund had increased the cost of production which would not be covered by current prices.

In April 2014, the Indian Supreme Court lifted an 18-month ban on iron-ore mining in the province, but resumption of mining operations was made subject to a yearly production ceiling of 20-million tonnes a year and stricter environmental guidelines. Since then the Goa government had 72 mining leases which had been cancelled in the wake of the court orders.

But as a silver lining, miners were looking towards a hike in the yearly production ceiling imposed by the apex court. A committee appointed by the Supreme Court to monitor and oversee resumption of mining in the province was expected to submit another report before the court, and indications available from the industry suggested that the committee could recommend an increase in the yearly production ceiling of another 15-million tonnes a year in addition to the already imposed 20-million tonnes a year limit, enabling miners to produce an aggregate 35-million tonnes a year.

However, the fresh delays in getting iron-ore production in Goa back on the rails have cast another pall of gloom on Indian trade in the raw material. According to Federation of Indian Mineral Industries, exports during the current year were expected to either fall below the seven-million tonnes achieved in 2014/15, or remain stagnant at best. As a result, India’s net importer status would worsen since imports were forecast to rise to 20-million tonnes against 15-million tonnes in the previous year.