Goan miners to export about 2.20 lakh tonnes iron ore in November

New Delhi: Leading iron ore miners in Goa - Vedanta and Fomento Resources - will export around 2.20 lakh tonnes (LT) of iron ore to steel plants in China and Japan this month.

The consignment will be the second such shipment out of the coastal state, where iron ore mining resumed last month after being banned by the Supreme Court in 2012.

Anil Agarwal-led Vedanta was the first firm to resume iron ore mining in Goa and the company's Iron Ore Division shipped its first consignment of 80,000 tonnes last month to China.

This month, Vedanta will export its second shipment of 80,000 tonnes, whereas another leading miner from the state Fomento Resources will ship two consignments totalling around 140,000 tonnes.

"We will export 80,000 tonnes of iron ore in the next few days. This will be our second consignment," CEO of Vedanta's Iron Ore Business Kishore Kumar told PTI.

Vedanta resumed iron ore mining after a gap of three years at its Codli and Bicholim mines in the state. It has been allowed to mine 5.5 million tonnes (MT) of the commodity. In total, Goa has been allowed to mine 20 MT of the ore.

Fomento Resources Managing Director Ambar Timblo said his company will ship two consignments of around 140,000 tonnes this month.

Goa mainly produces low grade iron ore (with iron content between 55-58 per cent), which is mainly exported to China and Japan. While China accounts for 75 per cent of the ore, the remaining is largely exported to steel plants in Japan.

Both the miners, however said that the sector in Goa is passing through its toughest phase as it tries to resume operations in the state amidst a subdued global economic sentiment and a commodities slump.

"Globally, iron ore prices are sliding and even prices of grades with 60-62 per cent iron content are below USD 50 a tonne. Imagine the price of our ore that is below 58 per cent content and over that the tax burden is making our industry uncompetitive," Kumar rued.

Price of iron ore with iron content below 58 per cent has fallen to USD 32 per tonne FOB (free On Board) in Goa, while the cost of production is about USD 34-35 a tonne, of which taxes alone account for more than 40 per cent, he added.

Expressing a similar view, Timblo said that the industry has been urging the Centre to remove the export duty on iron ore and the state government to cut Goa Mineral Ore Permanent Fund and transport cess.

Mining has a 30 per cent export duty on iron ore fines with iron content of 58 per cent and above and 10 per cent for below this content. For iron ore lumps, the duty is 30 per cent.

There is a 5-10 per cent levy for DMF and 10 per cent on export price for the Goa Mineral Ore Permanent Fund Scheme.

"Even if permanent fund and transport cess are removed, our production cost will come down by USD 3-3.5 a tonne. This will make us more competitive. We cannot check global prices but we can optimise our production," Timblo suggested.