Posted on 06 Jul 2012
Brazil's Vale SA, the world's largest iron ore producer, has shipped about 300,000 tonnes of iron ore pellets to major Indian steel makers so far in 2012, a company source said on Thursday.
Indian steel makers could attract overseas miners in the backdrop of the recent mining restrictions.
Mining operations in India have been curtailed due to a partial mining ban in southern Karnataka state, pushing many steel makers to operate below capacity.
On Wednesday, the southern state of Karnataka recommended that eight iron ore mines be approved to resume operations with a total capacity of 5.5 million tonnes per year, including a 2.2 million tonne mine operated by Sesa Goa.
"We are quite hopeful... we will have higher quantity of iron ore pellets going in their blast furnaces," a senior company official, who did not want to be named, told Reuters.
These exports were made from Vale's plants in Oman and Brazil, the source said.
Oman plant, which was established in May 2011, was initially targeted to cater to steel makers in the middle east, but it is very well located to serve the Indian market, especially companies based on the west coast, he said.
Vale also plans to set up a distribution centre in Malaysia to cater demand from China and India.
Vale sells around 40 percent of its annual iron ore output of about 300 million tonnes to China and sees the shipments as the best way to compete with its main Australian rivals, BHP Billiton Ltd. and Rio Tinto.
Vale has been catering to India's coal requirements from its mines in Australia and Mozambique.
"The response has been quite good and slowly we are increasing our presence (in coal)," said the source, adding Indian customers are doing repeat purchases.
The company mainly exports coking coal to India, Japan, Korea and Europe as well, and expects to start shipping thermal coal by 2014 after limiting logistics constraints, the source said.
India, which sits on the world's fifth-largest coal reserves, imported about 80 million tonnes of coal for power last year and that figure could rise to 400 million tonnes in 2030, according to a research agency.
