KOLKATA (miningweekly.com) - India’s Supreme Court on Monday permitted the auction of 11-million tonnes of iron-ore dumps from the western province of Goa, but did not go as far as permitting the resumption of mining operations, at least until February 2014.
The court, however, did not clarify whether the auctioned ore would be for shipments overseas or domestic consumption.
The court directed a six-member panel to determine a yearly quantitative cap on iron-ore mined in Goa, based on the principles of environmental sustainability and conservation of nonrenewable resources, with the panel expected to submit its report by February 15, 2014.
Mining industry sources said that clarifications would be sought from the court on whether the auctioned dumps could be exported and, if the court granted permission, it would provide a minor boost to overseas shipments of iron-ore, which had been steadily falling since the ban on mining was imposed in Goa and Karnataka.
Industry sources pointed out that the availability of the 11-million tonnes of additional ore for overseas markets would improve sentiments among local exporters, on the back of rising international prices and enquiries from traders representing Chinese steel mills, apart from bolstering much needed foreign currency earnings for India.
Over the past two months, import enquiries from China have been on the rise and Indian offers for high-grade iron-ore fines were showing an upward trend. Indian offers had increased from $132/t cost and freight (CFR) China early this month to between $138/t and $139/t CFR China riding on restocking by Chinese steel mills and supply constraints in local Indian markets.
However, iron-ore mined in Goa was of an inferior quality with average iron content ranging around 58%. Offers for these fines, however, had also firmed up to a range of between $75/t and $78/t CFR China riding on rising overseas demand for higher-grade ores.
Industry sources said that the court verdict would have a small, but nevertheless salutary impact on the revival of Indian ore exports, which had declined from 117-million tonnes in 2009/10 to 18-million tonnes in 2012/13 and were not expected to exceed 10-million tonnes in the current financial year if the court-ordered ban on mining was not eased.