Mines close as Indian iron ore exports slump

By Sourav Mishra and Swati Pandey

MUMBAI (Reuters) - India's iron ore exports slumped at their fastest annual pace this year in October as demand from major buyer China dried up, and sales in 2008/09 could drop 45 percent to below 60 million tonnes, a trade body chief said.

Mines are closing and job losses are being discussed as a global slowdown in demand for iron ore amid the credit crisis and likely deep recessions in major economies hit Indian firms.

Ore exports in October dropped nearly 60 percent from the same month a year ago to 3.9 million tonnes, Rahul Baldota, president of Federation of Indian Mineral Industries, told Reuters in a telephone interview on Friday.

"The demand slowdown is weighing on everyone. The question is how long will one be able to continue," he said.

Falling interest for iron ore from China, which buys nearly 75 percent of India's normal annual exports of about 100 million tonnes, has hurt domestic miners, Baldota said.

Several had cut output and smaller players had closed up as trading iron ore at the current price of $55 per tonne free on board was uneconomical, he added.

"We have already two mines closed ... it happened really fast. Even at $55 levels, Chinese buyers are not showing any interest," he said. "Mines are running only one shift from three shifts earlier. They are talking retrenchment now."

Indian miners sold iron ore at $140 a tonne in May-June.