The Karnataka High Court verdict, upholding the State's ban on iron ore exports, may push up prices, which are already on the rise following a revival in demand over the last few weeks.
The State had banned exports through its 10 ports in July to crack down on illegal mining. Shipments from Karnataka account for about 25 per cent of the country's 100-million-tonnes-plus of iron ore exports. This, incidentally, is half of the overall annualproduction of over 200 million tonnes. However, India's exports almost halved to 3.03 million tonnes in September, from a year earlier, the sharpest monthly drop in nearly two years. Karnataka produces about 45 million tonnes of iron ore a year and exports more than half of it, say traders. The much larger chunk comes from Goa.
As shipments from India shrink, global supplies are expected to fall, leading to higher prices. Iron ore prices in the September quarter had tempered due to a fall in demand from steelmakers in China though they have begun restocking, said a steel company official. The Federation of Indian Mineral Industries has estimated that iron ore exports this fiscal will plunge to 80 million tonnes from 117 million tonnes in the previous year. Revival in Chinese demand and ban on exports from India have pushed up prices of low grade ore （largely exported from here） to $100 from $80 a tonne in the last month, said a trader.
With the High Court dismissing the plea of 32 companies, including major exporters such as Sesa Goa, V.S. Lad and Sons and Kumaraswamy Minerals, the State will now have to decide the future course of action. It has, incidentally, set up an autonomous body to study illegal mining activity.
“The ban was supposed to be in effect till the panel submitted its report on illegal mining but there is no deadline for this report. Technically, the ban may prolong for a while,” said an analyst.
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