2013 iron ore exports halve, Goa ban hurts: research firm

NEW DELHI Thu Jan 9, 2014 11:05am IST

A general view shows the open pit of Sesa Sterlite iron ore mine in Codli village in Goa December 9, 2013. REUTERS/Krishna Das

A general view shows the open pit of Sesa Sterlite iron ore mine in Codli village in Goa December 9, 2013.

Credit: Reuters/Krishna Das

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NEW DELHI (Reuters) - India's iron ore exports more than halved to 14 million tonnes in 2013 due to a mining and shipment ban in top exporting state Goa, research firm OreTeam said, but the situation could improve this year as some restrictions are likely to be eased.

The ban, imposed in 2012 to clamp down on illegal mining following a similar step in Karnataka in 2011, has cut India's iron ore exports by about 85 percent, or 100 million tonnes, over the past two years.

India was the third-largest exporter of the steelmaking raw material before the bans, which have helped South Africa and Iran raise sales to top buyer China.

"OreTeam expects 2013 to be the worst ever for iron ore exports and from 2014, the situation could improve but not sharply or dramatically," said Prakash Duvvuri, head of research at the firm that collects data from ports and customs.

He estimated overseas iron ore sales by India, currently the world's No.10 exporter of the raw material, at 29.7 million tonnes for the calendar year 2012.

India's Supreme Court has set up a panel to determine a limit on Goa's production, after which it might take a decision to lift the ban in the state.

Graphic - Bans to bureaucracy choke India's iron ore exports link.reuters.com/raz65v

But Prasanna Acharya, mines director in Goa, does not expect a resumption in mining before October at the earliest. The state's shipments reached about 50 million tonnes in the fiscal year ended March 2011.

In neighbouring Karnataka, even though the ban was lifted in April last year, only 16 out of 115 mines have resumed mining due to delays in forest clearances.

Output from eastern Odisha, the largest producing state, could also be affected as a government-appointed panel, the Shah Commission, has submitted a report highlighting some illegalities in mining.

Deepak Kumar Mohanty, director of the directorate of mines in Odisha, however, told Reuters this week the state sticks by its forecast of raising production by 5 percent to more than 65 million tonnes in the 2013/14 fiscal year.

"With more caps and bans on production and exports, India may never regain its 3rd rank but the volume of exports being pushed out of the country may allow India to at least not fall below the 10th position in near future," Duvvuri said.

(Additional reporting by Jatindra Dash in ODISHA; Editing by Himani Sarkar)

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