Faulty port equipment likely to hit iron ore exports

Print this page Posted on : 09-07-2007 by recycleinme.com

Iron ore exports from Goa are likely to drop in the coming months because of a faulty handling equipment at a key port adding to woes caused by a firmer rupee, a senior industry official said.

5%CUT

The problem with one of two shiploaders at Mormugao in Goa, the state that accounts for about 40 per cent of India’s iron exports, is likely cut sales by 5 per cent, said Mr. Glenn Kalvampara, joint secretary at the Goa Mineral ore Exporter’s Association.

Goa had exported 40 million tonnes of iron ore last year, out of India’s total sales of 90 million tonnes, with the Mormugao port accounting for 27 million tonnes.

Mr. Kalvampara said exports from Mormugao could drop by about two million tonnes because of the equipment failure when shipments start from October after a four-month break during the monsoon.

“The loader is expected to be commissioned by December 1,” a senior Mormugao port official said, adding that the work for repair had already been handed to a firm.

It has been out of action since July, but exports form the State halts during the June to September rainy season.

RUPEE EFFECT

Mr. Kalvampara said exports from Goa were expected to drop 10-15 per cent this year, with an export tax and a firmer rupee weighing down sales.

The rupee climbed more than 10 per cent since end-2006 to a nine-year high of 40.20 per dollar in July, but has since come off and was trading at about 40.9, still up about 8 per cent.

India imposed a duty of Rs.300 ($7.3) per tonne on iron ore exports in the budget in February, but later cut the levy to Rs.50 for low-grade ores below 62 per cent iron content after protests from the local mining industry.

ROLLBACK

Mr. Kalvampara said the rollback was only on low grade iron ore fines or powdery raw material. Low grade iron ore lumps, which makeup 15 to 20 per cent of Goa’s exports, attracted a duty of Rs.300 per tonne, he said.

However, a global shortage of ships has pushed up freight rates, giving India a temporary advantage over rival Brazil for sales to main importer China.

Source : Business Line