Spurt in ore demand recharges mining

by MICHAEL FISHER
Posted on 2009-01-11
PANAJI - Mining activity in Goa has picked up considerably due to a push in demand for iron ore and this is good news to the truckers and barges serving the industry.
Volumes of iron ore to China have picked up significantly according to an official of Sesa Goa, a leading iron ore exporter. Sesa Goa has converted to Capesize vessels from Panamax for its exports to China. “China has started importing and we are making maximum use of the bigger capacity vessels,” said Mr U S Tilve, Sesa Goa general manager – mining. The capacity of a Capesize vessel is over a lakh tonnage whereas that of Panamax is 56,000 tonnage.
Chinese demand for Indian iron ore has picked up after a hiatus of three months. Barges carrying ore that were hit from the start of the mining season till November 2008 have made 20 to 25 trips during the month of December and truckers are doing similar trips, said sources close to the industry.
The factors behind the sudden rush for iron ore export to China is believed to be a $50 billion bail out plan by Beijing, and its steel industry has started importing iron ore as prices are at its lowest. Another factor is the expectation of a major announcement by China in April when its new corporate year starts. It is also believed that Goan shippers have been booked till the end of February 2009, sources close to the industry and wishing anonymity, said.
“Although business has picked up significantly, we can’t confirm any figures in this unpredictable current situation,” said Mr Glen Kalavampara, an official of the Goa Iron Ore Exporters Association. Till November 2008, Goa export volumes of iron ore touched a little over 19 million tonnes, Mr Glen said.
According to sources, India exported about 93 million tonnes of iron ore in the fiscal year ending March 2007 out of which about 75 per cent went to China. India’s June exports to China fell to 7.8 million tonnes from 10.6 million tonnes in the previous month. Goa’s export contribution is about 40 per cent. Indian iron ore for China was commanding a price of about $140 per tonne about four to five months ago. Today, iron ore prices have nosed dived to 40 and 60 per cent, sources said.