Goa port snag may hit exports

Goa's iron ore exports are likely to fall in the next couple of months due to faulty handling equipment at a key port in addition to woes caused by a firmer rupee, according to the experts.

Glenn Kalvampara, joint secretary at the Goa Mineral Ore Exporter's Association (GMEA) told the Business Standard that the problem lies with one of the two ship-loaders at the Mormugao Port Trust (MPT). The Goa-based port accounts for about 40 per cent of India's iron ore exports and is likely to cut sales by 5 per cent.

"Goa had exported 40 million tonne of iron ore last year, out of India's total sales of 90 million tonne, with MPT accounting for 27 million tonnes," he informed.

Kalvampara said that exports from the port would drop by about two million tonnes when shipments start in October, after the monsoon break.

The repair work at the port has been handed to a firm, but the loader is expected to be commissioned only by 1 December, according to MPT officials.

The export tax and a firmer rupee are also likely to weigh down on sales, according to Kalvampara. The rupee climbed more than 10 per cent since end-2006 to a nine-year high of 40.20 a dollar in July, but has since come off and was trading at about 40.9, still up by about 8 per cent.

India imposed a duty of Rs 300 ($7.3) a tonne on iron ore exports in the February budget, but later cut the levy to Rs 50 for low-grade ores below 62 per cent iron content after protests from the local mining industry.

Kalvampara said, "The rollback was only on low grade iron ore fines or powdery raw material. Low grade iron ore lumps, which make up 15 to 20 per cent of Goa's exports, attracted a duty of Rs 300 a tonne."

However, a global shortage of ships has pushed up the freight rates, giving India a temporary advantage over rival Brazil.