This today from Macro business on the resumption of Indian iron ore exports.
Note to all, just an unbiased view on the iron ore market...
Cheers lute
I noted this morning that Indian sourced iron ore inventories at Chinese ports appear to rising again. There is further news flow suggesting India may be set to resume substantial exports by December. From the Business Standard:
NEW DELHI (Reuters) – Goa expects court approval to resume by year-end the production and export of iron ore from mines with a capacity of about 40 million tonnes as it has taken steps to rectify problems that led to a mining ban eight months ago, a state bureaucrat said.
Allowing Goa, India’s No.1 iron ore exporting state, to resume overseas shipments, will boost available supplies to top market China and further pressure spot prices already reeling from the mainland’s slower steel demand growth.
“We’ve placed all the regulatory measures we have undertaken in front of the Supreme Court so that we can resume mining operations and exports under the strict supervision of the mines department,” said Prasanna Acharya, Goa’s mines director.
Goa, which exports about 70 percent of India’s total overseas shipments of the steelmaking component, suspended all mining operations in September last year after a report by the government panel found several instances of violations such as firms mining without licences or outside the lease area.
Soon after, the environment and forest ministry suspended clearances for all the 80 mines in operation in the state. The suspension was upheld by the Supreme Court, which also banned the transportation of iron ore from Goa.
“The best case scenario is resumption of mining, partly or otherwise, in November/December,” Acharya told Reuters.
He heads Goa’s Directorate of Mines and Geology, which regulates the grant of mineral licenses and is responsible for enforcing rules pertaining to prevention of illegal mining, transportation and storage.
Acharya expects up to 60 mines to be able to reopen without much difficulty as they are away from forests and had committed little or no irregularities.
This will coincide with 130 million new tonnes of supply from the big three Australian producers. India will be keen to recapture lost market share. It’s average cost of production is $50 which leaves plenty of room for discounting. The Australian supply will not want to be idle and much of it has a sub $50 price of production.
If India does return, all the conditions for an iron ore price war will be place.
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