Orissa halts iron ore export permits at 2 ports

BHUBANESWAR, India (Reuters) - India's top iron ore producing state has stopped issuing export permits for cargoes shipped via two small ports after they failed to cooperate on a state-led investigation into illegal mining, Orissa's mines minister said on Monday.

The move may have little impact on iron ore shipments from India, the world's third-biggest iron ore exporter after Australia and Brazil.

The two ports -- Gangavaram and Kakinada -- accounted for less than 6 percent of the iron ore shipped out in the first seven months of the current fiscal year to next March.

"The Gangavaram and Kakinada ports did not cooperate" with the state mines and steel department's queries on the volume of iron ore exported through these ports and the mechanism they followed to prevent illegal exports, minister Raghunath Mohanty told Reuters.

The state government had sought such details from all the ports that exported iron ore from Orissa.

"We will not issue the permits until they (port authorities) submit details and tell us what system they have," a senior official at Orissa's steel and mines department, who did not want to be named, also told Reuters.

Gangavaram port said in a statement late Monday it had provided data on export of iron ore fines to Orissa's director of mines in October and again in November.

"GPL (Gangavaram Port Ltd) again reaffirms its commitment to share any and all required information related to iron ore fines exports as may be required," it said in the statement.

Of the 35 million tonnes of iron ore that India exported in April-October, only 2 million tonnes were shipped through the Gangavaram and Kakinada ports, data from the Federation of Indian Minerals and Industry, a trade body, showed.

"It is not a matter of great concern as major ports like Paradip, Visakhapatnam and Haldia are still operational. Only few exporters use these ports," said Dhruv Goel, managing director with SteelMint, an iron ore trader in Orissa.

Indian shipments have been disrupted by government moves to investigate illegal mining, particularly in Orissa, Karnataka and Goa, the country's top iron ore producing states.

Iron ore exports have yet to resume from Karnataka, which accounted for a quarter of shipments before the state government imposed a ban in July 2010, even though the Supreme Court lifted the ban in April.

Sesa Goa (SESA.NS), India's top iron ore exporter, said last month that the country's total exports of the steelmaking ingredient may fall by a third to 65-70 million tonnes in the year to March 2012.

Spot iron ore .IO62-CNI=SI was down 1.2 percent at $138.30 a tonne on Friday, Steel Index showed, reflecting subdued demand from top importer China.

(Editing by Manolo Serapio Jr. and Malini Menon)