What is bad news for one is good news for the other.
India’s iron ore exports have been showing a steadily decline since 2010, not because of lack of production, but because of court-imposed bans put in place to resolve the murky issue of illegal mining. Two of its major ore-producing states, Karnataka and Goa, have been severely affected by the ban, which in turn has hurt India’s overall exports of iron ore.
So, while iron ore companies in India can only rue their fate, and wonder what 2013 has in store for them, the country that is said to have taken over from where India left is Australia.
According to data compiled by Bloomberg, Australia had supplied 318 million tons, or 47 percent of China’s imports in the first 11 months of 2012, up from 43 percent in 2011.
India, on the other hand, had exported 33.1 million tons in the first 11 months of 2012, for a mere 4.9 percent market share, down from 11 percent in 2011.
India’s share in iron ore exports to China, the biggest importer of ore in the world today, have come down from 20 percent in 2007 to 11 percent in 2011, and further down to 8 percent in the first half of 2012.
A report in The Indian Express stated that despite Australia’s overall trade deficit widening, revival in the Chinese demand for iron ore had seen prices for Australia’s single biggest export earner rebound no less than 77 percent from lows hit in September 2012 to reach $153.90 a ton in the first week of January 2013.
For Indian miners, so bleak is the situation that its highest miners’ organization, the Federation of Indian Mineral Industries (FIMI), has asked the government to drastically reduce the export duty on low-grade iron ore to 5 percent from the present 30 percent, which is going back to the pre-March 2011 days.
FIMI representatives say the current export rate had rendered shipments unviable, a kind of double whammy in the wake of the mining ban in some states. They say such high duty had made Indian mining companies lose their competitive edge in the global markets.