As recently reported by SteelOrbis, India’s Supreme Court has ordered the closure of all iron ore mines in in the state of Goa by March 15, 2018, until new leases and environmental licenses are granted through the auction process. The timing of the auction process is unknown and some in the region are concerned about its effect on Indian iron ore exports.
According to Indian customs data, India exported 19.88 million mt of iron ore in the calendar year 2017. Of that total, Goa-sourced iron ore totaled 10.95 million mt, or 55 percent of the export total. Goa is conveniently located on the southern west coast of India, giving it excellent access to the international markets. A majority of the volume is exported through Goa’s Mormugao port. Additionally, due to its proximity to Karnataka, it is also able to support some domestic steel consumption.
Sources inform SteelOrbis that the state of Karnataka has recently (as of early February) invited bids for eight iron ore blocks. Interested and eligible bidders can participate in the bidding process after purchasing a bidding permit. The additional production in Karnataka may limit the effect of the iron ore shortage from Goa in the Karnataka region, but sources also say that if the bidding process in Goa is layered in the same way with bidding permits and floating tenders, iron ore production in Goa could halt for several months.
Commenting on the situation, Goa chief Minister Manohar Parrikar said, “We are exploring all options, including auction of mining leases to ensure that the mining industry is not affected by the recent Supreme Court judgment.” He added that the Supreme Court had not prohibited export of iron ore and that “export never happens directly from the mining lease, but ore is jumped at the jetty and transported to the barge, therefore, no connection between export and extraction.” This option could help some mining companies with inventories on the end date to continue generating revenue. The minister has committed to “work out the fastest means to start mining through proper procedures.”