Indian top court allows iron ore exports from Karnataka

Iron ore exports from the Indian state of Karnataka may resume soon, following a court order today that lifts previous curbs.

The Supreme Court today allowed excavated iron ore to be sold under direct contracts from the Karnataka districts of Bellary, Chitradurga and Tumkur, overturning a judgement from a decade ago.

The court cancelled leases for 51 iron ore mines in Karnataka in 2012 for violating environmental and mining laws, and banned exports.

"The decision of the Supreme Court of India to allow sales of mined ore by entering into direct contracts without e-auctions and allowing exports will pave the way for part of the state's annual production 40mn t to be exported and sold to more domestic buyers," a steelmaker said.

Karnataka produced 33.91mn t of iron ore in April 2021-January 2022, the second-highest of any state after Odisha, according to mines ministry data.

"We welcome this judgement. It will make sure that there is an equal playing field [for Karnataka] on a par with the rest of the India," the Federation of Indian Mineral Industries' southern region chairman, Shantesh Gureddi, said.

"The court has also appointed a committee that will review the production limits in the state, and if the cap goes away production will go up as many mines are coming up for auctions," Gureddi said, adding that this will ensure there are no shortages — even if exports pick up.

Karnataka's iron ore production is capped at 35mn t/yr.

The daily Argus ICX 62pc iron ore index was at $135.90/dry metric tonne, 32pc lower on the year, while top domestic iron ore producer NMDC's monthly domestic price in May stood at 6,100 rupees/t ($79.80/t) for lump with 65.5pc Fe content, and at Rs5,160/t for 10mm fines with 64pc Fe.

By Sumita Layek and Deepali Sharma