Goan exporters see boom pass by as ore fails to move

State yet to allow lifting of stock from last month's auctions; meanwhile, price slumps abroad; bigger miners to wait for recovery

Iron-ore exporters from Goa have lost an estimated Rs 146 crore in three weeks due to procedural hurdles barring these from taking advantage of the high price of the steel-making raw material abroad

The state had auctioned 535,000 tonnes of low-grade ore on February 17; a second lot of 1.5 million was auctioned on March 5. In both, only traders and exporters participated, to take advantage of high global prices. However, the government has yet to issue purchase orders.

Meanwhile, prices have fallen abroad, specially in China, the largest importer of India’s ore. “Prices have crashed $11-12 a tonne in three weeks. Since the government is yet to issue purchase orders and tighten loose ends, shipments will be a steep loss,” said Shivanand Salgaoncar, president of the Goa Mineral Ore Exporters Association (GMOEA).

Ore in the spot market has fallen to $108-110 a tonne on cost, insurance and freight (cif) basis, a decline of $10 a tonne in a week and $12 a tonne since February 17. In January, spot ore was $125 a tonne (cif) in China.

Ore mining and export has been suspended in Goa for a little over a year, after cases of illegal mining. The Supreme Court then allowed the state to auction 12.5 mt in phases. The sector expects mining to restart in the state after August-September.

“Merchants and exporters can wait for the price to correct. We believe by the time they would get clearance, in probably three weeks, the price would rebound,” said Salgaoncar. Meanwhile, China has lowered its purchases, specially from India. Data compiled by the Federation of Indian Mineral Industries shows a 31.3 per cent decline to 10.4 mt between April and February. Overall exports fell 27 per cent to 12.6 mt during the period.

The state, meanwhile, has started tightening the loose ends. It is working to arrange transport from mines to ports. “We expect the procedural hurdles to get cleared by the month’s end. Thus, the first shipment of auctioned ore is expected to start by the first week of April,” said S Shridhar, ex-president of GMOEA. Goa possesses 1,000 mt, of which 90 mt was mined annually before the suspension a year earlier.