Karnataka government has stopped issuing permits for the movement of iron ore out of the state. It is reported that the action is aimed at stemming illegal mining. But analysis reveals that the decision is more out of the need to conserve ores for the massive steel capacity coming up in Karnataka in the next few years. Based on the Geological Survey of India (GSI) data, iron ore reserves left over in Karnataka as of 2010 are 800 million tons (mt) of which 500 mt is in Bellary-Hospet. The current installed capacity for steel plants in Bellary area is 14 million tons per annum (mtpa), which includes Jindal’s 10 mt. These plants require 25 mt of iron ore every year. Thus the reserves are barely sufficient for 20 years. Being in the close vicinity of the steel consuming centers in the western and southern India , these reserves are very economical and strategic from the energy efficiency viewpoint. Many steelmakers are therefore planning to set up facilities in the state. Jindal plans to up the capacity to 16 mtpa. Arcelor Mittal has signed a MOU with the Karnataka government to set up a 6 mtpa integrated steel plant. Also in the pipeline are two 6 mtpa plants of Brahmani and Surya groups. With these outlays, the steel capacity in Karnataka is slated to rise to 40 mtpa by 2015 and thus requiring iron ore input of 72 mt per year. Even after considering that new explorations may add 300 mt to the GSI stated reserves, the ore deposits are grossly insufficient barely covering only 15 years, if all the planned expansions go on stream. The decision by the Karnataka government is thus targeted towards investment, value addition and employment and therefore is in the interest of the state. But the sudden change in the policy may result in loss of income for truckers and the railways. Railways would be able to divert the rolling stock (engines, wagons etc) elsewhere but it would lose the freight of Rs 3000 cr. Almost 20 mtpa of ore was moved by trucks, wherein the aggregate investment was around Rs 7000 cr. This capacity will be idling till it finds alternate business. The fear is that these trucks and wheel-loaders may land up in Goa . Excessive capacity means price undercutting, which can spoil the profitability of Goan truck owners. The Goan truck lobby must immediately take up with the government to stop Karnataka trucks and wheel-loaders being transferred to Goa . What struck the Karnataka truckers may also strike Goan truck owners in near future. There was news of China banning low grade ores. There is also possibility of Centre banning or restricting exports. In such an event, what security do truck owners have? How will they repay their loans? Should not government create a provident fund like security for them? The Goan miners are likely to be benefited due to the ban. Karnataka exported 30 mt ore last year, which is 5% of ore trade in the Asia-Pacific region. With this supply choked, the prices should rise. The prices have risen by $10/ton since the ban was announced. This will help Goan miners to earn even more profits. Rajendra Kakodkar 9822101450 * * * Was life in the *kudds* glamourised? Who said, "It appears that the Goanese (sic) are a roving people, prepared to go to any part of the world for well-paid employment"? How did Goans find their first toehold in the Gulf? Find your answers in Selma Carvalho's *Into the Goan Diaspora Wilderness*. Buy from Broadways Book Centre, Panjim [Ph +91-9822488564] Price (in Goa only) Rs 295. http://selmacarvalho.squarespace.com/ * * *
