Goa's low-grade ore export faces stiff China pollution hurdle

Iron ore exporters from Goa face a new and daunting hurdle, from a stiffer environmental law in China.

This is also likely to affect sales through online auctions, begun only last month after a long gap due to the mining ban. The state government conducted two auctions to dispose a little over two million tonnes of ore, of the total unsold inventory of 11.5 mt. While steel mills stayed away, traders and exporters dominated. Auctions for the remaining quantity are scheduled soon.

“Exporters have been facing problems already on non–receipt of clearance certificates from the state government, which they expect to get by the end of this month, without which export cannot start,\” said Shivanand V Salgaocar, president, Goa Mineral Ore Exporters Association (GMOEA).

The other problem Indian iron ore exporters face is a high export duty, of 30 per cent. As for China, the government has imposed regulations restricting steel mills from buying low-grade ore.

“Since Goa produces only low-grade iron ore, the recent Chinese law will affect exporters badly,” said Haresh Melawani, chief executive at HL Nathurmal & Co, an ore mining and exporting company in the state. Ore deposits in Goa are mainly between 45 and 60 per cent of iron content.

These require beneficiation to convert into high-grade pellets for direct use in furnaces. So, mining companies will have to set up forward integration to convert such ore into pellets.

“Goa iron ore miners are already considering setting up pellet plants, for which capital expenditure will be an issue. But, that is the only future for survival,” said Melwani.