BL reported that iron ore and mineral exports from Karnataka fell by about 50% in 2008-09 owing to the 60% drop in global market prices since September 2008. For the period April to February 2008-09, Karnataka’s iron ore and minerals export amounted to INR 5,016.1 crore.

Industry experts said there was unlikely to be any improvement in prices in the near future. This is because China, which accounts for 95% of the State’s iron ore exports had stacked up large quantities of iron ore.

Mr Basant Poddar vice chairman of Federation of Indian Mineral Industries (South) said “From about USD 120 tonne to USD 130 tonne, prices have fallen to an average of USD 40 per tonne to USD 45 per tonne. At present, it is about USD 50 tonne to USD 55 tonne.”

The decline in prices began since September and continued till the end of 2008-09. However, there has not been any significant decline in volumes.

Mr Poddar ruled out an immediate recovery in prices.

Iron ore exports from Karnataka rose from INR 691.56 crore in 2001-02, when it was 3.4% of the State’s total exports, to INR 10,197 crore in 2007-08, constituting 7.7% of the total exports. Meanwhile, the growth of iron ore exports tapered off before the onset of the global economic crisis. While iron ore exports rose by 54.6% in 2002-03, 27.2% in 2003-04, 53.2% in 2004-05, 24.3% in 2005-06, 32.7% in 2006-07, this fell to 13.8% in 2008-09.

(Sourced from Business Line)