KOLKATA (miningweekly.com) – While iron-ore mining in the western Indian province of Goa is poised to resume within a month, there are no takers for the raw material, leading to the stockpiling of old inventories and a space crunch for new production.

According to a Goa government official, of the total 15-million tonnes of old iron-ore fines inventory occupying stockyards and ports, only six-million tonnes have been liquidated through seven rounds of auctions; however, in the absence of large-volume overseas buyers, local traders were refusing to transport the stocks.

The government was pushing hard to auction another one-million tonnes of iron-ore before mining operations resumed next month, as miners would continue to face an acute space crunch to stock new production, leading to sharp a rise at pithead dumps.

Citing an example, the official said that, at the seventh round of auctions concluded last week, only 50 000 t was sold against an offer of one-million tonnes.

Under the circumstances, the government was facing an uphill task in liquidating nine-million tonnes of old stocks and the department of mines could do very little to make space for new stock, the official added.

The resumption of mining in Goa was expected to be led by Vedanta Resources, which was readying to get production from its Codli mines under way, starting around mid-October.

Meanwhile, in a related development, a Supreme Court-appointed expert committee has recommended that the mining cap on production from all iron-ore mines in Goa be increased to 37-million tonnes a year, up from 20-million tonnes a year, which the Apex Court had earlier set as a precondition to lifting the three-year ban on mining in the province.

Simultaneously, to lure buyers and ensure higher volume offtake from mines, miners in Goa have sought a further reduction in export duty on low-grade iron-ore fines from the current rate of 10%.

Miners, in a petition to the federal government, said that, given the 60% fall in international prices of low-grade ore to $32/t to $38/t and no appetite for raw material from Chinese steel mills, a lower export duty would help miners clear old stocks and enable them to keep pushing volumes through aggressive pricing.

The miners have also contended that the 10% contribution towards the Goa Permanent Fund as mandated by the Supreme Court was also a burden in the depressed market. The combined incidence of all taxes and levies was also a major contributing factor in Goa iron-ore not finding any takers and the resultant rise in stockpiles.

Vedanta Resources has approached the Apex Court, challenging the mandatory payment towards the Goa Permanent Fund, just ahead of resuming operations of its Codli mines.