Karnataka Ore Exporters May Miss China Biz.

The political crisis in Karnataka is affecting iron ore exports from the state. Though the Supreme Court has directed the government to issue permits to iron ore exporters, nothing has happened till now. The non-issuance of export permits comes at a time when exporters from the Bellary-Hospet region have been flooded with orders from China. In addition, 99 of the 150 mines cannot operate as the Supreme Court has asked for a survey of iron ore mines. The survey was kicked off last Monday and is likely to continue for more than a month.

Basant Poddar, managing director of Mineral Enterprises , said: "The new exporting season starts in April-May for shipment in June. We have to take advantage of this season. But the Karnataka government is yet to issue export permits. If the government fails to issue permits, we will not be able to fulfil the Chinese demand." According to industry experts, a huge stockpile of iron ore estimated at 20-25 million tonne lies in the Bellary-Hospet region. Incidentally, a joint team led by the Supreme Court-appointed Central Empowered Committee (CEC) has commenced a survey of 99 iron ore mines in Karnataka from May 16 to demarcate their boundary. All the 99 mines identified by the court in Hospet, Bellary and Sandur would come under the scanner.

A special forest bench headed by chief justice SH Kapadia had ordered on May 6 for a joint survey by CEC, mines & geology department and also officials representing the Karnataka Lokayukta to determine whether these mining lease holders are involved in illegal mining. India is the world's thirdlargest iron ore producer and fourth-largest exporter. India exports over 90% of iron ore to China and sends about 5% to Japan.

Poddar added that India exports low-grade iron ore to China. "Even if the Karnataka government issues permits for export, 20% duty would make Indian ore non-remunerative . Right now, the situation is fine since iron ore prices are rising. But this is in the short term. Prices would ease once the demand-supply mismatch narrows," said RK Sharma, secretary general of Federation of Indian Mineral Services .

Source : economictimes.indiatimes.com