As iron ore economy crumbles, ports, shippers seek alternatives

BusinessA disused iron ore mine in Goa. express photo

Tata NYK Shipping Pte Ltd runs on a triangular route from Australia to Mormugao in India and then to China. The joint venture set up in 2007 between India's largest business group and one of the world's largest shipping line was expected to tap into the huge coal and iron ore business emerging between these three giant economies on the three flanks of the Asia-Pacific region.

But six years later, as the Indian government one by one switched off its iron ore mines in Goa, Karnataka and Orissa and delays in clearance mothballed the coast-based power plants, the liner is staring at growth in throughput that has dropped to 4.6 per cent in 2013 and is expected to barely improve to 9.5 per cent in 2014.

At the same time, all the mineral exporting ports in India are desperately looking to change their business. Ministry of shipping performance data shows of the 13 major ports, the worst hit were these.

Exports from Paradip declined by 72 per cent in FY13, Mormugao logged an equaly harsh 71 per cent dip and New Mangalore of 14 per cent. These are all the outlets of the three iron ore rich states.

Paradip is now trying to move into the LNG business though it faces no West Asian gas or oil rich states with the shipping ministry giving it a go-ahead. "Our plan is to ferry coal to India and on the return leg carry iron ore from there to China. It is not happening," Fujimoto Kazuyoshi, manager of the Asia Group of NYK Container Line, whose subsidiary is the joint-venture with Tatas told The Indian Express.

While the coal shortage has hit primarily the power sector, it is the absence of iron ore with a larger diversified use that has made mincemeat of India's manufacturing sector.

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