From Livemint:
After a hiatus of more than three years, Vedanta Ltd sent its first iron ore shipment from Goa to China on Monday amid a slump in global iron ore prices and falling demand in that country.
Vedanta shipped 88,000 tonnes of iron ore, making it the first iron ore mining company to start operations in Goa after three years due to a ban on mining, said a statement issued by Vedanta on Monday.
“This achievement of resuming operations after three years of suspension on mining activity is with multiple/significant challenges. Iron ore prices are in free fall and are nose-diving. We also are faced with an arduous task of recovering our fixed costs and look forward to a complete utilization of the manpower and resources. We are positive that we will overcome the tough times with the support of the government and all other stakeholders of the industry and well positioned to achieve our production target,” said Kishore Kumar, chief executive officer, Vedanta Ltd’s Iron Ore division, in the statement.
The iron ore division expects to mine 5.5 million tonnes of ore from its mines in Goa and export it as mines in Goa have an iron content (Fe content) of 58% and below, making it unsuitable for steelmakers in India.
It’s a far cry from Goa’s glory days when it exported nearly 50mt per annum. Even so, all of the 20mt cap will be exported over time and given the resumption of mining in Jarkhand and elsewhere what were net imports for India last year of 5-10mt will suddenly turn to net exports of 20mt or so. The ore is low quality but very cheap so I expect it’ll be sustainable for a little while and is another decent swing in the market.
