Economy, Business And Markets

Indian Firm to Sign Gol Gohar Deal

Indian Firm to Sign Gol Gohar DealIndian Firm to Sign Gol Gohar Deal

Indian state-owned mining company Kudremukh Iron Ore Company Ltd says it will soon enter into a pact with Gol Gohar, one of the largest mines in Iran. Under the arrangement, iron ore fines would be imported from Iran and converted to pellets at KIOCL facility at Mangalore.

Malay Chatterjee, chairman and managing director of KIOCL, says: “The first shipment of 50,000 tons of iron ore fines from Gol Gohar Mine in Iran is expected to arrive in September this year. KIOCL would make pellets from the fines and export them to Iran. We are going to sign an agreement with Gol Gohar mines soon wherein KIOCL would source one million tons of iron ore fines every year.”

He said the KIOCL pellet making facility is strategically located close to the Mangalore Port and iron ore shipment from Iran would take only four days to reach the plant.

KIOCL runs a four-million-ton pellet manufacturing plant at Mangalore.

Gol Gohar Mine contains six ore bodies spread over an area of 40 sq km. The total deposits of iron ore in the region are estimated to be over 1.135 billion tons. The major ore body has a deposit of more than 650 million tons.

Chatterjee said Indian pellet makers were facing a tough time due to the spate of cheaper imports of pellets from China with the situation worsening further due to devaluation of Chinese currency yuan.

Imported pellets are being sold in India at Rs4500 per ton while domestic production cost works out to Rs6500 a ton. According to Pellet Manufacturers Association of India, large quantities of iron ore fines, pellets and steel products are being imported to the country, forcing pellet and steel manufacturers to cut capacities. Pellet makers across the country are operating at barely 35% of their installed capacity of 83 mtpa.