Goa Begins Export Of Low-grade Iron Ore

  • Goa started export of 88,000 tonnes of low-grade-ore to China amid global volatility in the iron ore industry.
  • The state begins operation after three years, following the removal of the ban imposed by the Supreme Court relying on Justice MB Shah Commission’s report on Rs 35,000 crore worth of illegal mining in the state last year.
  • Officials of the mining firm Vedanta said that despite competition from Australian and Brazilian ore’s that have taken Goa’s spot in the Chinese steel industry, Goa’s low grade ores are still lucrative.

Exim Bank’s red flag: Why most Africa deals go to so few firms?

  • The state-owned Export Import Bank of India, or Exim Bank, has raised a “red flag” pointing out that a large number of hugely concessional lines of credit (LoCs) extended by India to highly indebted poor, low and middle income countries in Africa and the sub-continent during the last 10 years have been cornered by four little-known companies.
  • Of these, an investigation by The Indian Express has revealed, a bulk of the 510 projects awarded by 61 countries from 2004-2014 — 62 projects in 28 countries worth $1.1bn — has gone to Delhi-based Angelique International Ltd, headed by Ajay Krishna Goyal.
  • The three other companies — Overseas Infrastructure Alliance (Pvt) Ltd (OIA), Lucky Exports and Jaguar Overseas Ltd — have together contracted 110 projects. OIA has executed 20 projects, Lucky Exports 17 and Jaguar Overseas 11. The Exim Bank has alerted the finance and external affairs ministries about these findings.
  • With most of these LoCs extended to African countries, the “red flag” assumes significance with at least 54 heads of government from the continent scheduled to gather in Delhi from October 26-29 for the Africa Summit.
  • LoCs are essentially soft loans with interest rates as low as one per cent per year for tenures upto 20 years, with a moratorium of five years for repayment. They serve as an important tool in the government’s outreach endeavour and provide a diplomatic lever in enlisting the support of poor and developing countries on a range of issues.
  • The bulk of countries (24) where Angelique has executed or is still undertaking projects are in Africa. It has also contracted nine contracts in Cuba, Honduras, Myanmar and Lao PDR.
  • When contacted, Exim Bank chairman and managing director Yaduvendra Mathur, a 1986-batch IAS officer, told The Indian Express: “We have pointed this out to the ministries of finance and external affairs. These are projects awarded by foreign countries. There is not much we can do about it.”
  • Exim Bank raises funds for these LoCs from international debt markets and signs agreements with foreign countries on behalf of the Government. It receives a subsidy called the ‘interest equalisation support’ for providing such concessional finance.
  • In the last 10 years, the Government has allotted through the Budget Rs 1,904 crore to make up for the difference between the cost at which it raises funds and the concessional rates at which it lends to the countries.
  • Initiated in 1985, the LoC programme got a new direction in 2003-04, the last year of the previous NDA regime. In Budget 2003-04, then finance minister Jaswant Singh said it was time for India to review its dependence on external donors and re-examine the LoC route of international assistance to others.
  • Initially called the India Development Initiative, it was renamed as the Indian Development and Economic Assistance (IDEA) Scheme and gathered momentum under the subsequent UPA government.
  • The scheme was extended by the UPA in March 2011 for five years till 2014-15 — a review is pending for over six months now.
  • Responding to a detailed questionnaire, the MEA said that projects under LoCs are awarded by the borrowing countries in accordance with their own procurement laws and regulations. “(But) it is correct to say that a small number of our companies who compete aggressively for these projects have won a majority of the contracts,” it said.
  • Asked about the pending IDEA Scheme review, the MEA said: “It expired on March 31, 2015 and is currently in the process of being renewed. The accompanying LoC operational guidelines are also being reviewed with inputs from multiple sources, including Exim Bank.
  • The objective is to try and improve the process so that projects are better conceived, prepared, appraised and implemented. Greater transparency and accountability is also sought to be engendered.”