Pursuing iron ore export opportunities
India is now the world’s third largest international seaborne supplier of iron ore
With buyers looking to diversify their purchases of iron ore to avoid reliance on Brazil and Australia, and India enjoying a shipping cost advantage into China, iron ore port developments have been moving apace.
Indian iron ore exports grew for the tenth consecutive year in 2009 to reach 116m tonnes, up 9% year-on-year. The country is now the world’s third largest international seaborne supplier of the commodity.
Although efforts are being made to limit India’s iron ore exports to help meet soaring domestic demand for steel, volumes are still expected to increase in the coming years, according to most analysts. But, as Unctad notes, infrastructure remains a problem.
“Historically, bottlenecks in the transport systems, both railways and ports, have been major stumbling blocks for increasing Indian iron ore exports,” says the latest industry report from the UN body. “Federal and state governments have, however, tried to support the growth of the iron ore industry, first, by speeding up licence and permitting procedures, and second, by vowing to spend as much as $25bn on upgrading ports and transport links to the coast.”
Krishnapatnam Port Company (KPCL), located on the east coast of India, 180 km north of Chennai in the Nellore district of Andhra Pradesh, plans to become one of the world’s most significant ports and India’s largest industrial gateway in the coming years, with total capacity for some 200m tonnes. Iron ore exports are a key target.
In the year 2009-10, some 10.6m tonnes of iron ore were handled and this is expected to rise to 20m tonnes in 2010-11.
Work has already started to increase the port’s covered storage area from 900,000 sq ft to 1.5m sq ft. A new conveyor system will become operational in October and 11 cargo sidings have been built inside the port to feed huge transit storage areas.
“The port has discharged coal at the rate of 42,756 tonnes per day and a loading rate of 60,021 tonnes in 24 hours for iron ore fines, which is the highest in India using the conventional system of loading,” says a port spokesman. “A mechanised cargo handling system will be operational in October this year and will provide iron ore loading rates of 120,000 tonnes per day and a coal discharge rate of 96,000 tonnes per day.
“We have 6,500 acres of land, so there are no storage restrictions.”
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