Odisha contributes almost entirely towards the chrome ore production in India. Since the past three months, chrome ore mines have been going through a lot of instability, which has been affecting the production levels. Indian Chrome ore production recorded a drop of 42% m-o-m in Jul’ 20.
It is quite normal for mining activities to get impacted during monsoons, as most of them are open cast mines. The miners usually tend to produce and store more ore during the pre-monsoon months viz., April-May to compensate for expected loss of production during the rainy season. However, this year there was a severe contraction in the production levels due to the lockdown imposed by the govt in April, following the lockdown. The mining sector faced a huge labour shortage in line with strict government norms.
Lockdown was just the tip of the iceberg as the pandemic led lockdown was accompanied by the change of hands for the major three mines viz., Sukinda, Kamarda and Saruabil mines. This further led to reduced production from these mines.
Meanwhile, ferro chrome producers without captive chromite ore mines are desperately waiting for OMC to increase their production levels and conduct an auction soon.
In 2014, the chrome market witnessed similar trends with Chrome ore production down by 14% y-o-y to 2.4 mnt, due to the mining license renewal issue in Odisha which left several mines inactive. However, these are unprecedented times and even if the chrome ore auctions happen in September, the bid prices would be exorbitant, which would be another challenge for the ore-longing ferro chrome producers.
Leave a Reply