Karnataka ore ban hits biz of New Mangalore Port

The Karnataka government’s ban on mining and movement of iron ore in the state has impacted the business of New Mangalore Port Trust (NMPT). Along with Tadiri and Billikere, NMPT ships close to a half of Karnataka’s 30 million tonne of iron ore. Tadiri and Billikere are minor ports and normally remain shut during monsoon.
A recent report on the port sector by broking house Motilal Oswal notes that while other ports, notably Ennore and Kolkata, reported a healthy 25%-plus year-on-year growth in cargo in September, Kandla and NMPT were the laggards, with the latter being the worst performer. NMPT accounts for 5% of the country’s cargo composition. The report says iron ore shipments from India were 4.5 million tonne in September 2010 compared to 5.2 million tonne in September 2009.

“Last September, NMPT had done exports of 37.53 lakh tonne but this year the comparable figure is 8.38 lakh tonne. The ban has clearly hit our revenues and cargo volumes,” said an NMPT official.
While refusing to indicate the revenues generated from iron ore exports, the official said the arrival of freighters carrying limestone and coal had dropped significantly. These freighters carry iron ore on their return trips. Limestone arrivals were placed at 7.43 lakh tonne last September but were placed at 2.98 lakh tonne in the comparable period this year.
At an earlier interaction with ET, Praveen Agarwal, chairman of the Mormugao Port Trust (MPT), had said the Karnataka ban on ore exports would not materially impact the fortunes of MPT.
“In FY2010, we handled 42 million tonne of iron ore, of which the iron ore from the Bellary-Hospet was only about three million tonne. This year, this figure should rise to about five million tonne even as the total quantum of iron ore exports from MPT should be around 46 million tonne,” he said.
However, the drop in cargo volumes does not worry analysts like Mr K Ravichandran, senior VP and co-head, corporate sector ratings at ICRA .
“We have factored this (drop in volumes). But one is worried that a prolonged ban on iron ore exports, notably fines, would pose an environmental hazard as the material is left in the open,” he added.

Source: The Economic Times