- Production in Odisha falls by 16% y-o-y in 5MFY’26
- OMC’s output drops by 2 mnt y-o-y, NMDC raises volumes
- Govt mulls reforms to boost ore output amid surging steel production
Morning Brief: India’s iron ore production inched down by approximately 2% y-o-y in April-August 2025 (5MFY’26) to around 114 million tonnes (mnt) versus 116 mnt in 5MFY’25, as per provisional data available with BigMint.
Although iron ore production in the first half of 2025 witnessed a slight uptick of 3% y-o-y to reach 158 mnt, weaker production in the June-August period was the reason behind decline in total production in 5MFY’26.
State-wise output
Production from Odisha fell by over 16% y-o-y in 5MFY’26 to around 56 mnt compared to 67 mnt in the year-ago period. However, the other leading states such as Chhattisgarh and Karnataka witnessed an uptick in production. Maharashtra and Goa, too, saw an increase in output.
Highlights of 5MFY’26
- Sharp fall in Odisha production: The decline could be attributed to elevated iron ore inventories with OMC at the beginning of the fiscal year, which prompted the miner to adjust its production strategies. April onwards, OMC’s auctions fetched weak responses, with declines in offtake, bids, or prices, reflective of a downtrend in downstream segments. An early monsoon also disrupted mining activity, though July’s volumes are likely to have faced a more significant impact than June.
OMC’s output fell to 12 mnt from 14 mnt in 5MFY’25. Moreover, JSW surrendered the Jajang mine due to high costs which also contributed to production declining from India’s top iron ore producing state.
- Maharashtra sees surge in production: The state witnessed a 40% surge in production in 5MFY’26. In early June, the expert appraisal committee (EAC) under the Ministry of Environment, Forests & Climate Change, approved Lloyds Metals & Energy’s expansion of its iron ore (hematite) production capacity from 10 mnt/pa to 26 mnt/pa at its Surjagarh mine in Gadchiroli, Maharashtra.
The plan includes setting up of extensive primary and secondary crushing and screening infrastructure to support the enhanced capacity, with 32 years (till 2057) of lease.
- Increase in NMDC’s output: The PSU miner raised output to 18 mnt from 14 mnt in 5MFY’25. It expects production in FY’26 to be at around 55.4 mnt which is 100% of its Environmental Clearance (EC). The company reported FY’25 production at 44 mnt, down 2% y-o-y against 45 mnt in FY’24. However, iron ore production in Q4FY’25 inched up 1% y-o-y to 13.31 mnt despite logistical challenges during the quarter.
- Ore output drops while crude steel volumes rise: India’s crude steel output rose by 12% y-o-y during April-August to 68.3 mnt, however iron ore production during the period dropped 2% y-o-y. Projections show that crude steel output in FY’26 is expected to reach around 167 mnt, an increase of 10% y-o-y. The downtrend in iron ore production, therefore, has raised serious concerns.
- Iron ore imports surge: Domestic supply tightness and availability of high-grade material at competitive rates from Brazil, Oman and Australia saw India’s iron ore imports rising by over 200% y-o-y in 5MFY’26 to 4.35 mnt compared with 1.36 mnt in the year-ago period.
Outlook
Reforms are expected soon to boost iron ore availability in the country. Key proposals include a review of the mine auction mechanism, with a plan to cap premiums at 50% and award blocks based on the highest upfront payment to ensure timely mining operations. Since 2015, 138 blocks have been auctioned but only 37 are operational, largely due to clearance delays and uneconomic projects.
A Minimum Dispatch Agreement (MDPA), requiring dispatch of at least 80% of environmental clearance (EC) capacity for non-auctioned mines has been mooted. Indian miners hold ECs for 470 mnt of iron ore but produce only about 290 mnt. On trade policy, the government is considering a uniform export duty across iron ore grades, though pellets may remain exempt.
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