According to a spokesman of the Goa Mineral Ore Exporters' Association, the price settlement concluded by JSM, a Japanese organisation, with one Brazilian and two Australian suppliers, is a benchmark for all iron ore imported by Japan.

The Association pointed out that the price cuts come in the wake of sluggish demands for iron ore in 1998. Cuts in the production of steel in US was followed by shrinking of output in Japan, due to a severe economic recession. Japanese steel production is expected to amount to just 92 million tonnes as against 103 million tonnes in 1997.

Goa'siron ore mine owners say newer rivals in Australia have begun producing iron ore with lesser impurities and at lower prices, as compared to the State's product. Just one Australian company, Hammersley-Yandi, is producing enough to take over all of Goa's market share, the Association claims.

The Association spokesman told The Indian Express that Goa's iron ore mining industry, which is expected to earn Rs 900 crores during the current financial year, will see the turnover drop by Rs 100 crores in 1999-2000. All of Goa's main buyers -- Japan, China, South Korea, Italy and Romania --are reducing output due to the recession.

Dattaraj Salgaocar, Goa's prominent mine-owner and president of the Association has warned members that several of them will have to close down or resort to drastic restructuring of their operations. ``The price cut along with a definite cut in quantities will severely affect mining companies financially and may cause some of them to close down, leading to layoffs andretrenchments,'' he warned.

Despite the emergence of tourism and other industries in Goa, mining, which began in the State early this century, is one of the biggest employers. However, the iron ore produced in Goa is of inferior quality and unfit for use in Indian steel mills.