Govt of Odisha has issued orders to suspend mining at three iron ore blocks amid violation of MCDR Act 1988 and the provision rule- 10 (5) of OMPTS rules, 2015. The mines include Murgabeda of DR Patnaik, Jaribahal mine of Kashvi International and Deojhar mine of Tarini Minerals Pvt, sources have reported SteelMint.
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Iron Ore Production & EC Limit
Quantity in mnt
Source: SteelMint
There has been a continuous shortfall of iron ore, suspension of above mines may lead to further iron ore availability crisis and increase in prices. As against production of 123.8 mn t iron ore in Odisha from Jan 2019 to Nov 2019, total production in the same period in the current year has been only 98.2 mn t.
Only 8 of the auctioned mining leases, were able to start production and dispatch till date. According to SteelMint data, total production from the auctioned mines stood at 6.51 mn t in Apr-Oct’20 against a target of 28.70 mn t during the period, given the fact that these mines were required to produce a minimum of 80% of the output as recorded in the previous two years. Production from these mines in Apr-Oct’19 was 42.31 mn t.
Towards early Dec’20, Indian steel minister held meeting for early operationalization of the auctioned iron ore mining leases in Odisha. Discussions centred around resolving the issues regarding operationalisation of the auctioned iron ore mines in Odisha where production and dispatch has still not commenced. This would result in reducing the price of iron ore which has gone up substantially in the last one month due to adverse market sentiments, emanating primarily from reduced supply of iron ore in Odisha from the recently auctioned mine.
SteelMints’ assessment of Odisha iron ore fines Fe 63% assessment has increased from about INR 3,700/t in Oct’20 to INR 5,400/t in Nov’20 ex-mines, including Royalty, DMF & NMET.
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