Odisha- India’s largest iron ore producing state recorded total merchant iron ore dispatches at 6.82 mn t in Dec’20, up 11% against 6.13 mn t in Nov’20. The figures exclude movement for export and dispatches from captive mines- SAIL, JSW (Gonua & Narayanposhi) & Tata Steel.
State govt. has been trying hard to push dispatches. In Dec’20, Odisha govt. has proposed to penalise auctioned iron ore mines for not meeting MDPA targets. The Directorate of Mines, Odisha Government, has now sought departmental approval to slap them with penalties, charged at 24% of average sale price, as published by IBM, on their monthly shortfall in dispatch, which is to be appropriated from their respective performance security.
Following this in Jan’21, the Union Ministry of Mines has sought public/stakeholder comments on a proposed amendment to the Mineral Concession Rules, 2016. In case of non-fulfillment of minimum dispatch criterion, the existing Rule 12A states that “appropriate action” shall be taken against the new lessee as per MDPA. The government has mooted this financial penalty for non-fulfillment of minimum dispatch on a quarterly basis along with the provision that if the successful bidder fails to meet the minimum dispatch requirement for 3 quarters in a row, the government may terminate the mining lease.
Key highlights
- Sarda Mines recorded the highest dispatches at 1.63 mn t for the month against 1.34 mn t in Nov’20.
- OMC, state-owned miner, recorded a 10% rise in dispatches to 1.35 mn t for Dec’20 as against 1.22 mn t in the last month (Nov’20). Odisha Govt. has allocated two auctioned and non-operationalized mines of Guali and Jilling mines to OMC with an objective to increase iron ore production. These mines have a combined production limit of 12 mn t.
- Dispatches of iron ore from Rungta Mines picked up by 30% to 1.08 mn t in Dec’20, as compared to 0.83 mn t in Nov’20.
- JSW Steel’s dispatches stood at 0.79 mn t in Dec’20, largely stable on monthly basis. According to company’s press release on 17 Jan’21, JSW Steel surpassed 100,000 t iron ore dispatch in a single day from its Odisha mines.
- AM/NS iron ore dispatches were recorded at 0.33 mn t for Dec’20 as compared to 0.36 mn t a month ago (Nov’20).
Odisha Iron ore Dispatches in Dec’20 & Nov’20
Figure Includes Sarda Mines, JSW Steel (Jajang & Nuagaon) & AMNS Movements
Figure excludes SAIL, Tata & JSW Steel (Gonua & Narayanposhi) captive movement
Qty in mn t
Source: SteelMint, Provisional Data
Outlook: Indian railways has rolled out its new iron ore loading policy recently. The new policy accords higher priority to seamless iron ore traffic for domestic manufacturing activity, according less importance to movement of material for exports. With increasing production and improved logistics, Odisha iron ore dispatches are likely to rise further.
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