SAIL leads list of India’s top 10 miners in 2021

The Steel Authority of India (SAIL) led the list of India’s top 10 miners in terms of their environmental clearance (EC) limit, in 2021, as per data maintained with SteelMint.

The EC limit is actually the capacity of each mine that the Ministry of Environment and Forests (MoEF), under the Government of India, mandates in terms of optimal production in a year. The EC is a complex process and issued after a series of steps are cleared by the miner.

SAIL had an EC limit of 59.81 mnt last year, followed by India’s leading miner NMDC with 51.90 mnt. Tata Steel stood third with 46 mnt and JSW Steel was at fourth with EC limit of 38.44 mnt.

Odisha-based OMC was in fifth spot with 34.24 mnt, followed by Rungta Sons with 16.41 mnt, and Serauddin & Co with 15.15 mnt. In 8th spot was AM/NS India with an optimal volume 12.66 mnt, while JSPL, at 10.61 mnt, and Vedanta, with 6 mnt, rounded off the list.

Among the top five, SAIL could meet only 56% of its EC limit with 33.7 mnt last year, while NMDC, India’s leading miner in terms of production, met 78% of its EC limit at 40.6mnt. Tata Steel met 60% at 27.4 mnt, and JSW Steel, by a whopping 89% at 34.3 mnt. OMC could meet around 59% of its EC limit, at 20.2 mnt.

These miners together produced over 190 million tonnes (mnt) of iron ore in 2021, against their cumulative EC limit of around 291 mnt, revealed provisional data available with SteelMint.

India’s iron ore production up 20% in 2021

Meanwhile, India’s iron ore production rose around 20% y-o-y in 2021 to 246.3 mnt against around 206 mnt in 2020, SteelMint data shows. In fact, production peaked in 2021, compared to the last five years, surpassing 235 mnt in 2019.

Production in 2021 rose on higher output from India’s top iron ore producing state, Odisha, with incremental volumes added from other key producing states.

It may be mentioned, total output had slumped in 2020 due to loss in production following transfer of mining leases after the mineral auctions in Odisha and the Covid-19 outbreak in the same year that led to logistics and supply chain hurdles in Q1CY’20. However, production recovered from Q4 onwards.

Odisha output rises

Odisha’s production rose a sharp 24% in 2021 to nearly 138 mnt against around 110 mnt in 2020. It enjoys the lion’s share of 56% in the country’s overall iron ore production.

Although a couple of key merchant leases in the state expired last year, a majority of mines auctioned in 2020 resumed full-fledged operations, boosting overall production in 2021.

• JSW Steel emerged as the leading miner from Odisha with total production of 28 mnt in CY’21 compared with just 9.4 mnt in the preceding year.
• Steel major AM/NS India increased its iron ore in Odisha and started new operations in 2021. Production by the company increased a whopping 350% to 7.2 mnt from 1.6 mnt in CY’20.
• State-owned Odisha Mining Corporation (OMC) raised production sharply by 65% y-o-y to 20.24 mnt from 12.25 mnt in 2020. Notably, the allocation of auctioned, yet non-operational, mines to OMC contributed to raising the miner’s overall production.

Merchant miners in Odisha saw their production volumes shrink, with the bar on dispatches for over-production, failure to fulfill MDPA targets and production-related complications at the auctioned leases as well as expiry of leases, in some cases, being the key reasons.

Steelmakers SAIL and Tata Steel recorded more or less stable production y-o-y from Odisha.

Other states’ output up too

Chhattisgarh’s iron ore output increased 17% y-o-y to over 40 mnt while Karnataka saw an uptick by nearly 20% to over 38 mnt against 32 mnt in CY’20.

Production from Chhattisgarh and Karnataka are expected to rise on higher output by PSU miner NMDC in the coming months as well as auctions of mining leases. NMDC boosted production by around 30% y-o-y to 40.62 mnt in 2021 from around 31 mnt in 2020.

Production from Jharkhand increased to over 24 mnt from 21 mnt in 2020, with a large chunk of it coming from the captive mines of steel producers.

Looking ahead

Additional volumes are expected from the mines auctioned in the second phase of the Odisha auctions in Aug-Sept’21.

Capacity expansion plans of major steel majors are expected to boost production further.

SAIL’s iron ore consumption, post-expansion, will increase to 39 mnt from the current over 27 mnt. Further, new pellet plants, of 4 mtpa capacity at Gua, 1 mtpa at Dalli and 2 mtpa at RSP, have been planned for utilization of accumulated iron ore fines and generated fines.

NMDC, as per its annual report, is planning iron ore production of 47 mnt in FY’22 while Tata Steel plans to augment iron ore production from 30 mtpa to 45 mtpa in the next five years.