Iron ore supplies from southern India’s Karnataka state are expected to make their way into the global spot market “only gradually” after the state government resumes issuing export permits from 20 April, local sources tell Steel Business Briefing.
Since export permits – also known as mineral despatch permits – are issued at the mine head, exporters will be unable to move their existing stockpiles from mines to ports before 20 April. Market watchers note that the government is unlikely to issue permits to miners and traders that are presently being investigated for alleged illegal operations.
Sources say they also expect to face bureaucratic delays in securing permits, given the state government’s “disinclination” towards ore exports.
“The imposition of the ban itself was a farce,” a Bangalore-based exporter tells SBB. “The state government was simply trying to protect the politicians involved in illegal mining. And throughout the court proceedings, the government kept resorting to delaying tactics," he says, adding "I don’t expect them to promptly start issuing permits now; they can still make it difficult for us."
Consequently, ore supplies from the state are likely to start trickling into ports only by end-April or early-May. Though India’s monsoon season will see some ports on the west coast shut by late May, sources note that only the Belekeri and Karwar ports of Karnataka, and ports in neighbouring Goa state are closed for monsoons.
Karnataka’s New Mangalore port, and other ports in the neighbouring states of Andhra Pradesh and Tamil Nadu – which are functional throughout the year – are alternative channels for exporting Karnataka-origin ore.
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