By Krishna N Das
NEW DELHI Nov 11 India's Supreme Court gave the
go-ahead on Monday for the auction of around 11.46 million
tonnes of iron ore already mined in Goa state, potentially
doubling the country's exports this year to top market China if
overseas sales are allowed.
The court also said it would set up a panel to decide on a
cap for Goa's iron ore output and this should submit an interim
report by Feb. 15, 2014, leaving mining still on hold.
"We are setting up a six-member expert committee to study
the cap on production based on carrying capacity of roads and
such," Justice A.K. Patnaik said in the Supreme Court.
He did not specify whether the iron ore could be exported
after auction. The Supreme Court imposed a ban on exports and
production in Goa last year in a crackdown on illegal mining.
The move to allow the sale of mined ore, and the potential
export of the same, is unlikely to have any significant impact
on the global iron ore supply chain and prices, with the mining
ban in Goa remaining for now.
While analysts expect a gradual recovery in Indian exports
over the next two years, the pace is likely to be modest and far
from the record high of more than 117 million tonnes set in the
fiscal year through March 2010.
Spot iron ore prices have fallen about 15
percent from this year's peak of near $160 a tonne as a slower
economy curbs Chinese demand while top miners Rio Tinto
and BHP Billiton continue to ramp up
India used to be the world's third-largest exporter of iron
ore, shipping out ore worth more than $7 billion per year, with
much of that from Goa state. But restrictions in Goa and
neighbouring Karnataka have slashed output and exports.
India's shipments to China have slowed to a trickle at just
over 8 million tonnes from January to September, down 75 percent
from a year before.
Most of Goa's iron ore goes to China, fetching about $75 per
tonne for low-grade ore of less than 52 percent iron content.
But domestic steelmakers are also eager for supplies.
Sesa Goa Ltd, India's top private-sector mining
company and a unit of London-listed Vedanta Resources Plc
, would be the biggest beneficiary if mining resumed in
Goa, as it is the largest producer in the state.
Sesa Goa shares were down 0.55 percent at 1019 GMT, slightly
outperforming the BSE market index.