BEIJING: London-listed metals group Vedanta Resources has shipped iron ore from India for the first time in three years after the country’s top court partially lifted a ban on mining exports earlier this year.
88,000 tonnes of iron ore was shipped on the vessel Ao Hong Ma to China on 19 October.
Vedanta’s iron ore division expects to mine 5.5 million tonnes of iron ore from its mines in Goa, R Kishore Kumar, chief executive officer of Vedanta’s iron ore business, told IHS Maritime. “The low grade ore is not used by local steel makers, and most of it will be exported by March 2016, Kumar said. Other miners in the state are targeting export of a further 14.5 million tonnes of iron ore by March 2016.
Vedanta is also seeking more production capacity allowance from the Goan government which is now capped at 20 million tonnes/year by India’s Supreme Court.
Mining in the key iron ore producing state of Goa was banned in 2012, following a crackdown on illegal mining by the Supreme Court and the government.
Vedanta said that it was facing “multiple and significant challenges” as it re-starts mining after a gap of three years. “Iron ore prices are in a free fall and are nose-diving. We also are faced with an arduous task of recovering our fixed costs and look forward to a complete utilization of the manpower and resources,” Kumar said.
Vedanta is also lobbying the Indian government to roll-back a 10% duty tax levied on iron ore exports to remain competitive in the global market.
At its peak in 2012, India exported as much as 60 million tons of low grade ore to China.
However, Kumar believes that China will continue to make steel. “China is not stopping production of steel. They will continue to import ore”.
