Iron ore exports from India’s key Karnataka state are likely to fall 67% in the year to end in March 2011.

It is due to the state’s ban on exports that has hit supplies to the global market and hardened prices, a trade body official said.

“We are losing about 2.5Mt of exports every month,” David Pichamuthu, director, southern region of Federation of Indian Mineral Industries (FIMI), said.

“We are losing production too and people might be laid off. Some of the mines are keeping skeletal staff.”

The south-western state that produces about 45Mt/y of iron ore of which it exports 30Mt, banned exports from 10 ports and stopped its transport to other ports in July, citing a drive against illegal mining and the need to preserve the ore for domestic use.

Miners appealed to the Karnataka High Court against the order, but lost the case in November when the court upheld the state government’s order and observed that it would take six months to root out illegal mining.