* Exports to resume from April 20
* International prices unlikely to fall on ruling -analysts
(Adds quotes, background)
By Krittivas Mukherjee
NEW DELHI, April 5 India's top court lifted a
ban on iron ore shipments from the state of Karnataka on
Tuesday, freeing up about a quarter of supplies from the world's
third-largest exporter as strong demand from China keeps prices
The southern Indian state had banned shipments of iron ore
from 10 ports and stopped its transport to other ports for
exports in July last year, citing a drive against illegal mining
and the need to preserve the raw material for local steelmakers.
"The court ordered that after April 20 the state government
order on the ban will be null and void," said Ankur Kulkarni, a
lawyer for S.B. Minerals, one of the petitioners.
Lawyers of both sides said the April 20 date gives the state
time to put in place infrastructure such as checkpoints and
satellite tracking systems to prevent illegal mining.
Karnataka's government will return to the court in the first
week of May to report steps taken to curb illegal mining, an
approach the federal government prefers to blanket export bans.
"Once the court satisfies itself with the measures taken by
the state it will formalise the lifting of the ban," said Sumeet
Goyal, lawyer for iron ore producers and petitioner, MSPL.
India has quadrupled taxes on iron ore exports and raised
freight rates to boost the domestic steel industry and create
But it does not have the technology to absorb all of its
low-grade fines locally and a total export ban could create
problems of storage besides losing billions of dollars in export
India ranks behind Australia and Brazil in output with most
of its approximately 100 million tonnes of annual shipments
landing in China, which has the world's largest steel industry.
India's iron ore exports fell for an eighth consecutive
month in February as Karnataka's ban cut sales. [ID:nL3E7EU0UD]
Tighter supply from India had helped global prices soar,
with spot prices .IO62-CNI=SI hitting a record near $200 a
tonne in mid-February.
For a snap analysis of the court order [ID:nL3E7F517O]
Factbox on India's iron ore sector: [ID:nSGE71R075]
Timeline on iron exports curbs [ID:nL3E7F51DY]
Trends in India's steel industry: [ID:nSGE710040]
China sees record steel output in 2011 [ID:nTOE71F046]
Analysis on the impact of export duty hike [ID:nL3E7DS0RX]
Analysts say iron ore prices are unlikely to collapse
following the court ruling, with demand from China remaining
strong and new additional capacity in the global seaborne market
unlikely to come through until 2013 or 2014.
Indian traders agreed prices were unlikely to fall.
"I do not expect exports to rise due to two important
reasons. The one is high export duty, while the other is the
steep rail freight," R. K. Sharma, secretary-general at the
200-member Federation of Indian Mineral Industries (FIMI), told
Prices began to bounce back late last month as Chinese
steelmakers replenished run-down inventories.
Spot iron ore prices IODBZ00-PLT .IO62-CNI=SI are up a
modest 2-5 percent this year after sliding from the record
levels in February.
India produced around 226 million tonnes of iron ore in
2009/10 and exported some 117 million tonnes, mostly to China.
The western state of Goa is the biggest exporter.
Exporters and miners from Karnataka had first challenged the
ban in the state's high court, but lost. They petitioned the
Supreme Court in November. [ID:nSGE6BF06Y] [ID:nSGE70J04E]
The court order weakens plans by other top Indian iron ore
producing states Orissa and Chhattisgarh to ban exports.
Shares in Indian iron ore miner Sesa Goa SESA.BO jumped
6.5 percent to 314.20 rupees after the top court decision. The
company is owned by Vedanta Resources (VED.L) which is poised to
hear whether it will win government approval to buy a majority
stake in Cairn Energy's (CNE.L) Indian assets.
(Additional reporting by R. Venkatraman; Editing by Jo
Winterbottom and Anthony Barker)