Sesa discards China ore-ban as rumour

PANJIM, APRIL 21
Sesa Goa on Wednesday discarded as ‘thus far a rumour’, the internationally reported ban by China on low grade ore.
News broke out late on April 8 that China has banned traders from importing iron ore below 60% Fe. Goa being a predominantly low grade iron ore source with China alone buying 95 percent of the total exports from here, the news of the ban has created uncertainty over the future of the industry in Goa.
“We have an office in China, yet we have not come across any communication of such a ban,” claimed P K Mukherjee, managing director, Sesa Goa Ltd.
He went on to add that since April 9, Sesa Goa has continued to do business in the spot market and the buyers included Chinese traders as well. “So far, Sesa’s business has not been impacted with the reported ban,” said Mukherjee.
Sesa the largest producer and exporter of ore from Goa too depends heavily on the China market. This season itself Sesa Goa has produced 22 million tonnes and sold 20.5 million tonnes of 85 per cent went to China alone. Traders contributed to 25% of Sesa sales.
Mukherjee takes solace in the fact that development in China cannot stop and for development to take place, China would need to continue importing ore.
“Mining is a resource based business. By its very definition it implies depletion of natural resources for better quality of life. There was a time when nobody used to buy below 63% Fe. But today even 50% Fe sells. Places like Australia, traditionally rich in high grade ore, are today finding it increasingly difficult to supply high grade ore. There is news floating around that China will ban import of ore from the 3 big supplying countries so that they can control rocketing prices. If they do that, how will their steel industry survive? And, how will their development happen? It does not add up,” he reasoned.
Sesa Goa, post the acquisition of the Dempo mines has an estimated reserve of about 353 million tones. “It is difficult to come to a finite number. We have started exploring existing mines on a more scientific basis and the results have been positive,” said Mukherjee.