The recent decision of the Karnataka government to ban export of iron ore fines from the state has impacted iron ore handling agencies such as New Mangalore Port and South Western Railway (SWR) zone in the State. In July this year, the Karnataka Government imposed a ban on the export of iron ore from minor ports. The Government initiated this move to stop the illegal transport and export of iron ore fines and help complete the inquiry by the Karnataka Lokayukta into illegal mining in the state.

Though there is no direct ban on the export of iron ore from New Mangalore Port, the halt in mining activities in the hinterland has affected the port's performance.

NEW MANGALORE PORT

Of the nearly 30 million tonnes of iron ore mined in Karnataka in 2009-10, New Mangalore Port exported more than five million tonnes, contributing a major share to its traffic throughput. But during the first half or so of the current financial year, New Mangalore Port handled only 22 per cent of what it handled in the corresponding period in the previous year.

Mr P Tamilvanan, Chairman of New Mangalore Port Trust (NMPT), told Business Line that the port has witnessed a shortfall of around three million tonnes in the handling of iron ore cargo. Till mid-September, the port had handled around eight lakh tonnes of iron ore cargo, against around 37 lakh tonnes of iron ore fines in the corresponding period of the previous fiscal.

Iron ore has contributed a significant share to the total cargo handling at New Mangalore Port over the years. In 2004-05, when demand picked up for iron ore fines in the international market, the port began handling this commodity in a big way.

From 2004-05 till 2008-09, iron ore fines contributed more than 16 per cent to the total traffic of the port. In 2008-09, the share of iron ore to the total traffic went up to more than 22 per cent. In 2009-10, the share came down to nearly 15 per cent of the total traffic.

The port, which had handled nearly three million tonnes of iron ore fines in the first six months of 2009-10, could not reach even a million tonnes till mid-September of the current financial year.

Sources in the shipping sector said that other major ports such as Chennai and Visakhapatnam are not affected as badly as they receive cargoes from various Government undertakings such as MMTC and NMDC. In the case of NMPT, private exporters play a major role in the iron ore handling at the port.

Mr Shekar Pujari, President of New Mangalore Port Stevedores, said that Karnataka has ion ore deposits of around 3.5 billion tonnes. The state exported around 30 million tonnes in 2009-10 from mines in Bellary, Hospet, Koppal, Chitradurga and Tumkur districts.

At one point of time, the port was getting around 2,500 iron ore trucks a day from the mines in the hinterland. The trucks bringing iron ore fines to the port used to take back fertiliser cargo to the users in the hinterland; and coal, coke, betonite to factories in the hinterland, he said.

SWR AFFECTED

The story is no different with respect to the Hubli-headquartered South Western Railway (SWR) zone. Formed in 2003 with Hubli as its headquarters, SWR has achieved significant progress in freight loading over the years.

The total originating freight loading, which stood at 31.5 million tonnes in 2004-05, reached 40.06 million tonnes in 2009-10. The zone witnessed an all-time high total freight loading of 46.27 million tonnes in 2007-08.

In fact, iron ore contributed nearly 70 per cent to the total freight loading of SWR. The railway zone, which loads iron ore from various centres in Bellary-Hospet region in Karnataka, transports them to various export points in the country and to domestic industries.

The zone, which was loading around 21-22 rakes a day last fiscal, is now loading five rakes a day. Simply put, the railway zone's handling of iron ore fines has come down from 80,000-100,000 tonnes a day in the last fiscal to 20,000 tonnes a day.

The total iron ore loading in the zone is now one-fourth of what it was in the last fiscal. Even though the first two months of the current fiscal showed good progress in loading, the trend came down in later months. Sources in Railways said that around 32 million tonnes of iron ore loading was expected from SWR zone at the beginning of 2010-11. With the current loading trend, the zone may end up loading around 16-17 million tonnes of ore during the fiscal, they felt.

Source: The Hindu Business Line