Large iron ore exports volumes from the southern Indian state of Karnataka destined for China, led by mines operated by Vedanta, emerged for the first time in December last year since the ban on overseas sales by mines in the state was lifted in May of the same year, SteelOrbis learned.
Accordingly, in the last week of December Karnataka mines operated by Indian resource major Vedanta Limited booked a total of 168,000 mt of medium grade ore of Fe content of 57 percent. The sources pointed out that, even though the ban on iron ore exports from mines in Karnataka was lifted in May 2022, actual deals did not materialize immediately due to the unprofitability of sales, as the Indian government instantly imposed a 50 percent export tax on lower grade ore. The large volume bookings by Vedanta became possible only in December after the Indian government in November scrapped the export tax, the sources said. “It is a big change since the state has almost a 40,000 mt capacity and the quality is superior to Odisha, the primary exporter from India,” an Indian source stated.
However, the resurgence of exports from mines in Karnataka failed to offset the sharp decline in aggregate exports from the country during the rest of the financial year.
Data sourced from the ministry of mines showed that iron ore exports, including pellets, declined sharply by 58 percent compared to the previous year to 15.70 million mt in 2022. Iron ore alone recorded a sharper decline of 69 per cent in 2022, falling to 9 million mt in 2022.
Aiming to prevent the deterioration of environmental conditions and secure a sustainable supply to the domestic market, exports of iron ore from Karnataka were banned in 2012 by India’s Supreme Court, a ban which remained in effect until May 2022.