Iron ore exports up 2% in FY14; to grow at healthy rate in FY15

SC's order to lift mining restrictions in Goa to boost iron ore exports

Iron ore exports, which declined from over $7 billion per annum to $1.69 billion in 2013-14, are expected to get a big boost following the Supreme Court's order to lift mining restrictions in Goa.

"Goa, which primarily produces low quality iron ore, accounts for 55% of the total exports of metal from India. Due to the mining ban the exports were adversely impacted but after the Supreme Court's decision the exports will grow at a faster pace in 2014-15," an official said.

In 2012-13, the country's iron ore exports were only $1.66 billion.

The Supreme Court had banned mining in all 90 mines in Goa from October 2012, due to investigations into alleged illegal mining operations.

Last Monday, the Supreme Court allowed an annual cap of 20 million tonnes of iron ore to be extracted in Goa.

The ban on mining has brought much hardship to Goa's economy, since mining is one of key contributors to its finances.

Following the ban, shipments of iron ore plunged to 18 million tonnes in 2012-13 from nearly 168 million tonnes in 2010-11. In value terms, before the ban, India was exporting iron ore worth over $7 billion annually.

During April-February 2013-14, the export was only 12.57 million tonnes.

During April-February 2013-14, mining output, with a weight of about 14% in the Index of Industrial Production (IIP), shrank 1.1% compared with a decline of 2.3% a year earlier.

The boost in exports due to the Court's decision would also have favourable bearing on the country's total exports, which fell short of the $325 billion exports target in 2013-14. India's overall exports touched $312.3 billion in the last fiscal.

According to commerce ministry estimates but for the ban the country would have exported 100 million tonnes of iron ore.

India is the world's third-largest exporters of the steel-making raw material, with most of its shipments landing in China that houses the world's largest steel industry.