MetalMiner recently reported on how Indian steelmakers Tata and JSW are both planning to expand iron ore imports thanks to a Supreme Court mining ban in the ore-rich state of Odisha.
Both are building up stockpiles after the Supreme Court order of May 16 that directed it to halt operations in Odisha. For Tata that means a shortfall for the company’s 10 million-ton-producing steel plant in nearby Jamshedpur.
The steelmaker reportedly imported the first shipload of 45,000 metric tons of ore from Western Australia in April which it had claimed was “for “testing purposes of its steel mills.” A second ship had recently unloaded 17 metric tons in Paradip Port at Odisha, claimed the media report.
Though it’s still the first quarter of the present financial year, analysts feel if the trend continues, iron ore imports by India may average higher than the last two years. Though the Odisha Government has renewed licenses of some mines, and is expected to streamline the mining process soon, leading to, perhaps, a removal of the court ban. Analysts believe July and beyond will be a crucial period for ore imports if the ban is not removed. Incidentally, the Supreme Court appointed a “Central Empowered Committee” on mining in Odisha and it is expected to submit its final report to the court by the end of July.
Spot prices of iron ore fines have dropped in recent months, with current prices at US $90-95 a ton from about US $120 in March. Recent import-export figures show that the lifting of the mining ban in Goa had led to an increase in the ore exports to China, one of the biggest importers of Indian iron ore. India was once the world’s third largest exporter of iron ore, but has slipped to No. 10 this year.
With iron ore exports hitting a low of 14.42 million ton in 2013-14, the mining sector has made a fresh plea to the new BJP government to take measures to revive exports. The Federation of Indian Mineral Industries, a representative body, recently petitioned the government to do away with the 30 percent and five percent export duties on iron ore and pellets, respectively, to enable them to export iron ore fines, which are not as in demand locally.
The author, Sohrab Darabshaw, contributes an Indian perspective on industrial metals markets to MetalMiner.