China Worried Over Falling Iron Ore Supplies From India.

Chinese companies are worried over the falling supply of iron ore from India amid growing reluctance in government circles to encourage exports without value addition.

India recently raised export duty from 15% on lumps and 5% on fines to a uniform 20% while Karnataka, a major supplier of high-grade ore, clamped down on exports in its bid to crack down on illegal mining.

"India is the third largest exporter of iron ore to China, after Australia and Brazil. India's iron ore exports to China have fallen to 95 million tonnes in 2010-11 primarily on account of the ban on exports in Karnataka," said Mr Sachin Sehgal, Shanghai-based Director at OreTeam.

China gets 42% of its iron ore from Australia and 17% from Brazil while India's share has fallen to 12% during the first four months of this year.

Some leading metals and steel players, including China Minmetals, Shenglong Resources Co , Sinosteel , Noble Group and Red Horse Resources Co , will discuss the issue at a meeting to be hosted by a steel commodity research house in New Delhi this week. The issue will also be on the agenda of a Federation of Indian Mineral Industries (FIMI) event in Singapore in June.

Sesa Goa managing director PK Mukherjee said dwindling supplies are causing concern to the company's Japanese, European and Korean buyers too. "This frequent change in duty structure has been a problem. And in the process, more stable suppliers such as Australia, Brazil, South Africa and to an extent Russia are reaping the benefits."

Source : economictimes.indiatimes.com