COVID-19 pandemic to hamper India’s iron ore export business

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Like its metals markets, India’s mining sector is in a state of turmoil because of the ongoing COVID-19 pandemic.

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A new report by data analytics company GlobalData has forecast India’s iron ore exports will decline by around 25% to 23.3 million metric tons in 2020 due to the coronavirus outbreak, the closure of ports, shortage of workers and transport restrictions.

This report follows the one by Fitch Solutions a few days ago that revised India’s mineral production growth forecasts downward, adding that despite mining operations being operational during the lockdown, other restrictions were hampering output.

Fitch has revised India’s mineral production growth rates per mineral by an average of 4.0% from previous rates, and there are reports that it may fall further in the coming weeks.

In February this year, the auctioning of 22 of 25 iron ore mines was completed, as their leases were about to expire in March 2020.

However, according to Vinneth Bajaj, senior mining analyst at GlobalData, the delays in the auctioning of mines in the eastern province of Odisha, which were to be held in March last year, due to the lack of clarity on the maximum lease area will severely damage India’s iron ore output in 2020.

The GlobalData report said the decline in 2020 could have been over 40 million tons had the Indian government not allowed new owners to start and continue operations until they had acquired fresh forest and environmental clearances.

To its credit, the Indian government has excluded the mining of iron ore, coking and thermal coal, limestone, dolomite, manganese, chromite, and other ferrometals from the lockdown.

But other disruptions, like shortage of production due to workers not reporting to work or disruption of port operations, will lead to the export drop.

Meanwhile, in another mining sector development in mining — but not directly related to the ongoing pandemic — residents of Goa, one of the provinces that was in the forefront of export of iron ore, want mining operations to restart.

The Goa Mining People’’s Front (GMPF), which represents the cause of thousands of people employed in the mining sector, has asked the local government to immediately resume the mining activities to revive the state’s economy, which has been significantly hit by the coronavirus pandemic.

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Mining activity in Goa came to a halt in March 2018, resulting in job loss and unemployment in the state.

Amid the pandemic, Goa’s tourism sector has been hit severely. As such, locals want mining operations to resume in order to prevent a rise in unemployment and loss of revenue.

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