Goa’s iron ore exporters in worst slump they can remember

November 7th, 2008 - 12:42 pm ICT by IANS  

Panaji, Nov 7 (IANS) Goa’s iron ore exporting industry is going through one of the worst slumps in its history, says a top official of an ore exporters’ lobby.Steel plants worldwide shifting to high grade ore to cut energy costs, several Chinese steel plants under closure and stiff competition from new-found mines on Australia’s western coast have combined to send Goa’s low grade ore exports into a tailspin, S. Sridhar, the executive director of industry lobby Goa Mineral Ore Exporters Association, said here Thursday.

“Demand has fallen by more than 50 percent to 300,000 tonnes this September from 700,000 tonnes last September,” Sridhar told IANS.

“Prices too have fallen by 60 to 65 percent. This is one of the worst slumps we have seen,” Sridhar said.

The closure of steel mills in China, which in the recent past had accounted for more than 85 percent of Goan ore exports, has hit the industry the most, he said.

“China was a booming market until the Beijing Olympics. During the run-up to the Games, the Chinese government ordered several steel mills closed to cut down on pollution. These mills have not opened since due to a possible credit crunch,” he said.

He further added that some of the ports in China had heavy inventories piled up to the tune of 70 to 80 million tonnes of ore.

Sridhar also claimed that the global economic recession had forced the infrastructure industry to cut corners wherever they could and one of the first casualties of the trimming exercise was low grade ore.

“Energy costs for processing low grade ore are higher when compared to high grade ore and so steel plants worldwide have switched to high grade ore to cut down energy costs. High grade ore is, unfortunately, non-existent in Goa,” Sridhar said.

He also said that the emergence of the Yandi mines in Western Australia meant that the mining industry in Goa would either have to buck up or go into the red. “The extraction of ore from Yandi mines alone rivals the extraction from the whole of Goa.”

In 2007, Goa exported nearly 33 million tonnes of iron ore to markets including China, Japan, South Korea and Romania.

Sridhar warned that the slump in the mining industry would engineer a trickle-down effect, affecting everyone all the way to truck and barge owners. “Decrease in demand will obviously mean hardships for everybody.”

He also hinted at possible resource sharing exercises by mining companies in Goa to cut production costs to fight the slump. “You could possibly see some joint ventures between mining firms in the near future,” he said.

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