China renews trade links: Bellary Black Gold fields starts booming again

China renews trade links: Bellary Black Gold fields starts booming again



By Shivakumar G Malagi



Bellary, Dec 12: With the major buyer of brand-Bellary iron ore-China renewing its trade links with India and governments move to cut export duty on ore as part of its economic stimulus package, iron ore mining industry in this ore-rich region is all set to pick up after spending a 'three-dry months' since September.
Post-September, scores of people depended directly or indirectly on mining related activities were hit worst when the mining activities and transportation of iron ore came to a standstill with the effect of global economic meltdown coupled with China's decision to stop importing ore from India.
Mass layoffs in 60-odd mining firms, seizure of trucks and earth movers by the banks, closure of service and new age business firms and ports lying idle on eastern and western coasts have started unfolding the tragic trail of Bellary mining mania.

Much to the relief of Bellary-economy, the reports from "China Industry Research and Investment Analysis: Iron Ore Mining Industry, 2008" stated that by 2010, China's import of iron ores will increase from 275 million tons in 2005 to 540 million tons. Besides, its dependence on imported iron ores will also be raised from 52.5 percent to 62.9 percent in the same period.

With China's ongoing construction of infrastructures such as power stations, ports, highways, and railways, insiders in ore export business says the China needs more iron ores in the coming three-four years, in turn, Bellary miners, produce 40 million tonnes per year are much sure to get supply orders again from China.

Close on the heels of the governments' decision to cut export duty on iron ore to 0% on fines and 5% on lumps in December first week, the price of ore at international market has increased $ 5-6 further from $ 60, which remained same for almost three months.

Rahul Baldota, president of Federation of Indian Mineral Industries says that in good times of the industry, before September, ore prices stood around $ 125-130 and then, dollar was hovering between Rs 40-42. With the recent dollar appreciation that is around Rs 50, the mining industry at present is not a business under loss for those who have direct trade links with China as prices reached up to $65-70.

"We can not see the peak prices again at international market, but things will improve further with China renewing its interest in placing orders. However, by this fiscal year end, ore export will come down by 25-30 per cent compared with the previous year due to last three dry months", remarks Rahul Baldota.

To confirm the restart of `shut-down' mining industry, the transporting of ore through railways to the ports has gradually increased from six rakes per day in October to 16 rakes in current month and local banks started receiving cheques from international buyers.