Karnataka to issue iron ore export permits next week

Karnataka to issue iron ore export permits next week

Mumbai: Karnataka which has lifted an export ban on iron ore imposed last year following a court verdict, will start issuing transport permits for shipments of the commodity by next week, official sources told Reuters.

The one-week delay in restarting exports is seen as procedural as the state government has to put in place infrastructure such as checkpoints and satellite tracking systems to prevent illegal mining.

It had banned shipments of iron ore from 10 ports and stopped its transport to other ports for exports in July last year, citing a drive against illegal mining and the need to preserve the raw material for local steelmakers.

Earlier this month, the country’s top court ordered the ban to be lifted, freeing up about a quarter of supplies from the world’s third-largest exporter as strong demand from China keeps prices firm.

“We are at it, we will do it fast. By next week we would issue transport permits," said a source at the department of mines and geology, adding “action will be taken as per the court’s order."

Currently, only transport permits meant for domestic consumption are issued.

Iron ore exports from India fell 18.6% in February, as the ban on exports by Karnataka continued to cut sales.

Industry officials said export deals would pick-up in a steady manner after the issuance of export permits as the neighbouring Goa port will be shut from 6 May for monsoon.

Tighter supplies from India, along side strong demand from China, had helped global prices soar, with spot prices hitting a record near $200 a tonne in mid-February.

Most of India’s approximately 100 million tonnes of iron ore exports land in China, which has the world’s largest steel industry.

Government has already quadrupled taxes on iron ore exports and raised freight rates to boost the domestic steel industry and create jobs.

But it does not have the technology to absorb all of its low-grade fines locally and a total export ban could create problems of storage besides losing billions of dollars in export revenues.