Australian Bureau of Agricultural and Resource Economics said in a quarterly commodity research report that India will experience a decline in its market share of global iron ore trading in the next few years.

ABAER said in the report that “Iron ore exports from India increased strongly over the past few years in response to high spot prices in China. However, because of infrastructure constraints and export taxes, Indian iron ore has higher cost compared with Australian and Brazilian ore.”

Market participants agreed and said that India will be marginalized going forward due to high costs, including land transportation and poor infrastructure at ports.

An iron ore trader said that “It is ok when you are in a bull market, but when you are in a bear market, it is the weakest that will be out first the weak will get weaker. Larger miners in Australia like BHP Billiton can survive even if iron ore prices drop to 2007’s level.”

A miner in India previously told Platts that land transportation costs for iron ore transported from mines to ports were around USD 20 per tonne to USD 30per tonne, whereas the cost of iron ore production in India is USD 10 per tonne to USD 20 per tonne.

source : Platts

Find More Mining News : - -