Sharp fall in collection of mining revenue due to closure of some key mines in the state, the Odisha government has asked operational mines to increase dispatches, which in turn will fetch them royalty.
Joda, one of the key Iron ore producing circles in Odisha, has a dispatch shortfall of 3.49 MnT from the non-captive mines in January, 2015. The Iron ore dispatch limit for January has been fixed at 4.53 MnT for January. However, only 1.03 MnT has been dispatched.
In Jan’15, the Center government has approved a proposal of Odisha government to increase Iron ore output of two miners by 16.56 MnT pa.
Two miners benefited by the decisions were Rungta (two mines) and Serajuddin (one mining lease). Rungta Mines now have the environment clearance (EC) to extract 6 MnT additional Iron ore per year from existing clearance of upto 3.5 MnT. While, Serajuddin can now extract 15.15 MnT Iron ore a year against 4.5 MnT approved capacity.
Odisha Miners cut Iron Ore Prices by upto 38% in last 4 Months; may fall further
Odisha based miners have already cut Iron ore prices to an extent of 38% in last 4 months in order to increase dispatches. However, sources mentioned that buying is still subdued on the backdrop of falling steel prices in the domestic and global market. If buying remains weak, further price cut can be expected in coming weeks.
Rungta Mines (Odisha) Iron Ore Prices
| Size (mm) | Grade (Fe%) | Prices | |||
| Feb’15 | Jan’15 | Dec’14 | Nov’14 | ||
| 5-18 | 65 | 5,850 | 6,350 | 7,300 | 7,700 |
| 5-18 | 63 | 5,550 | 6,050 | 7,000 | 7,400 |
| 10-30 | 65 | 5,200 | 5,700 | 6,650 | 7,050 |
| 10-30 | 63 | 4,800 | 5,300 | 6,250 | 6,650 |
| Blue Dust/Fines | 63 | 2,400 | 2,700 | 3,600 | 3,900 |
Prices in INR/MT
Prices are on FoR siding basis; including royalty
Source: SteelMint Research
Odisha based Companies refuse to lift Iron Ore Allotted under 50:50 Rule by State Government
State based companies refuse to lift Iron ore allotted to them under 50;50 rule set by the state government. Steel manufacturers blamed that prices fixed are way too high than current market prices. Also, most of the manufacturers show disinterest in paying a bank guarantee of 10% to the state government.
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