Karnataka iron ore ban slows ports

The ban, which impacted ten ports including New Mangalore, was in response to illegal ore mining and transportation that is said to be running rampant throughout the country.

Further, the prohibition also restricts the moving of Karnataka-produced ore to other, larger ports across India and so has had a further effect on Chennai and Goa, according to Jeffrey Landsberg of Commodore Research.

It started in early August when the Karnataka authorities uncovered a mining scam whereby iron ore without ownership papers was being transported illegally to evade tax collection.

The immediate response of halting a few shipments had a limited effect, and the Karnataka government turned to a complete ban of iron ore exports as the only way to put significant pressure on the illegal activities. Karnataka produces approximately 46m tonnes of iron ore each year, with roughly 40m tonnes of the ore exported to China.

Iron ore exports were restricted at the ports of Padubidre, Karwar, Tadadi, Belikere, Bhatkal, Honnawar, Kundapur, Maple, Hangarkatte, and Mangalore. Mr Landsberg explained: “Most of the ports are relatively small and currently not very active due to India’s ongoing monsoon season – but taken together the ban will have an impact on overall Indian iron ore exports, resulting in China importing less iron ore from India and making up the tonnage from Brazil, Australia, and other minor exporters.”