Goa ropes in MMTC to sell 11 mn tonne iron ore

Huge stocks had piled up as SC had shutdown mines in Karnataka, Goa and Odisha on charges of illegal mining

The Goa government has roped in Central public sector unit MMTC Ltd to sell 11 million tonnes of iron ore lying with it since the Supreme Court clampdown on illegal mining in the state.

"Recently, the Goa chief minister and other senior officials held discussion with us on the sale of 11 million tonne of iron ore stock lying in the state since the Supreme Court suspended mining operation there three years back. We have agreed to take up the responsibility and await the government order in this regard," MMTC chairman and managing director Ved Prakash told Business Standard.

Prakash said, they would consider similar requests from other states burdened with iron ore inventories if approached by respective state governments.

It may be noted the Supreme Court had ordered shutdown of mines in Karnataka, Goa and Odisha on charges of illegal mining in those states between 2011 and 2014. At that time huge stocks had piled up because of restrictions on mining and sale of iron ore.

Subsequently the apex court had lifted the restrictions in Karnataka and Goa conditionally while the Odisha government had allowed the closed mines in the state to operate on the basis of provisions under newly enacted Mines and Minerals Development and Regulation (Amendment) Act, 2015.

However, due to sluggish demand for iron ore in the international market and dip in prices, there were difficulties in disposing of the piled up stock.

"Because of our elaborate trading infrastructure and experience in the global market, there would not be any problem in selling the ore", Prakash said.

On one hand, the lack of demand from the Chinese steel mills, the main importers of iron ore from India coupled with high export duty slapped on ore shipments have pulled down the export orders.

On the other, high base price in e-auctions conducted in states like Goa and Odisha, has resulted in very little offtake of ore during such exercises with prospective domestic buyers preferring to stay away. Waking up to the situation both Goa and Odisha have decided to cut the base price for iron ore e-auction.