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Karnataka ban on iron ore exports hits Chennai port
The ban on iron ore exports by the Karnataka Government is affecting the Chennai port. There has been no inflow of iron ore from that State in the last few days. The storage yard that usually has huge mounds of iron ore is half empty. The port is handling only the backlogs, according to a personnel working in the terminal.
“We are worried about the empty plots,” said Capt Subhash Kumar, Chairman, Chennai Port Trust.
“The Chennai port annually exports nearly 10 million tonnes of iron ore
mostly to China. The stock yard at BD2 berth has a capacity to store
nearly 6 lakh tonnes. The port will lose a good chunk of iron ore
throughput during the year if the ban continues for a long time, but
there will not be any revenue loss for the Chennai Port Trust (ChPT).
Exporters have taken plots on lease and they need to pay for the Minimum
Guaranteed Throughput,” he told Business Line.
Karnataka is the second largest producer of iron ore producing annually
nearly 45 mt of the 225 mt mined in the country. The ban will impact
export of iron ore from the southern ports of Chennai, Ennore,
Krishnapatnam and New Mangalore.
Predominantly, the iron ore handled in these ports originate from
Bellary-Hospet sector and, hence, any ban on movement of iron ore from
the sector for exports will translate into a total shutdown of iron ore
handling in these ports till the order is revoked, said an industry
source.
For top iron ore exporters such as MSPL of the Baldota Group, the ban
means they need to look at options such as trading, which has a lower
margin. “We have commitment to provide the cargo. We have to find new
ways to keep our clients happy,” said Mr Raghavendra Rao, Head
(Corporate Communications), MSPL Ltd, which exports nearly 2 mt from
Chennai to China. The company also exports nearly 2 mt from Goa and a
negligible portion from Krishnapattinam, he said.
“We feel this ban will be a temporary. It is more of a political
decision and not a business decision. We feel there should be a proper
mechanism to check illegal mining and not put a blanket ban on exports
that affect the genuine players too,” Mr Rao said.
Mr Rao said of the 240 mt mined annually, the domestic requirement is
around 80 mt. “Where will you store the balance cargo. You need to
export that. Any steel plant will take five years to build,” said Mr
Rao. There are nearly 12.5 lakh people (2.5 direct and 10 lakh
indirectly – this includes transportation) dependent on the iron ore
industry, he said.
Source: Hindu Business Line
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