Goa mining companies have lots of ground to cover after ops resume

Panaji: Goa mining companies which handled 50% of India’s iron ore exports until two years ago, are keeping their fingers crossed on the future of the industry in Goa. They will have to struggle to regain the lost iron ore market, the shrinking iron ore price which has touched a five-year low and taxes imposed by the state and central governments, if mining begins in Goa.
Mining companies also argue that 30% export duties on low grade iron ore, and an above 10% levy for Goa mineral development fund will put the industry under further stress. The iron ore price is constantly shrinking in the international market, which is a big worry for the industry. The price of iron ore for 58 grade has gone down to $55 per dry metric tonnes (DMT) from $100 per DMT in 2009. Companies will have to pay around $22 per DMT in the form of taxes and 15% as
royalty.
Aniruddha Joshi, vice-president, Sesa Sterlite, told TOI, “The current market is bad and it is not likely to get better for at least another two to three years.”
Mining companies are also planning to request Union finance minister Arun Jaitley to waive off the export duty on iron ore below 58 grade. Goan ore has mostly 58 grade and it cannot be consumed by the domestic industry.
Before mining activity came to a halt in September 2012, Goa exported iron ore to Japan, China, South Korea and some parts of Europe. Goa exported around 52 million tonnes of iron before mining activities came to a halt and all India iron ore exports figures, including Goa, was around 100 million tonnes. Goa exported 90% of iron ore to China which is now captured mostly by Australian mining companies. A senior officer at the directorate of mines and geology told TOI that China has stopped purchase of low grade iron ore which is produced in Goa due to a recession in
China. Joshi said that China has also developed its mining industry in a big way which could result in less exports from the state.
Chief minister Manohar Parrikar might have assured the people of the state that he will execute mining leases by the end of October and after mining resumes in the state, but, mining companies claim that actual mining operations will not resume any time before March 2015.
Last year, around 20 million tonnes of iron ore were exported from India, though the ban continued. The mines department has started e-auctioning of iron ore lying at ports, jetties and mining plots. So far, in four phase e-auctions, around 4.4 million tonnes of iron ore have been sold, out of which 4.5 lakh tonnes have been exported.
The declining iron ore price in the international market has forced the mines department to postpone the fifth e-auction of iron ore. Supreme Court has allowed the mines department to e-auction 15 million tonnes of iron ore which was confiscated. Speaking to TOI, S Sridhar, executive director of the Goa Mineral Ore Exporters’ Association (GMOEA), a body representing mining companies, said that mining has to resume as soon as possible. “Until and unless we have material in hand, we cannot approach buyers in China, but, we will definitely capture the market,” he added.