The Rising Influence of Rising Affluence

[DewDiligence]

(CLF/VALE)—India’s state of Goa could face a mining ban for as long as a year, reducing the supply of seaborne iron ore:

http://www.financialexpress.com/news/sesa-goa-output-may-shrink-to-13rd-of-target/1013703/0

In September, the Goa government first announced a ban on iron ore mining due to environmental concerns raised by the Justice MB Shah commission. However, on October 5, the Supreme Court extended the ban for a further one month till the Central Empowered Committee submitted its report.

Brokerage houses now expect the ban to last for at least a year. Sesa Goa has a capacity to produce slightly more than 15 mt of iron ore. Last year, it produced 12.7 mt mainly hampered by transportation hurdles in the state.

…Goa produced 20% of India’s iron ore last year, of which nearly 95% was exported. The state produces mainly low-grade iron ore and the domestic industry consumes a minimal amount for making sponge iron.
Citi Research said…that even while domestic steel industry won’t be affected, availability of iron ore will come down in the global markets.

This is presumably part of the reason for the big moves in CLF and VALE today.