India: Odisha Miners Rush to Increase Production; Prices Drop 34%

· Key merchant miners in Odisha are looking at scaling up their iron ore production in order to utilize their remaining Environmental Clearance (EC) approved for the financial year 2019 (Apr 2018 – Mar 2019).

· EC Limit: It is the approved production limit per year for each mine based on its mining plan

· EC limit will lapse if it is not utilized; it cannot be carried forward to next financial year

· In case, a miner excavates ore based on EC limit, the ore can be sold in the next financial year

· Miners would want to mine and stock iron ore, as most of these leases are expiring on March 2020 as per MMDR act

· Domestic Iron ore prices have dropped upto 34% in last 2 months on supply pressure. Fines prices have come down by 34% while lump prices have come down by 25%

· Serajuddin, RP Sao, Essel Mining and Rungta mines production rate has been low in last 8 months (Apr-Nov). There is scope of incremental production to what they have produced on an average in last 8 months

· Miners may explore export opportunity to de-stock their ore. Rungta mines have increased their exports in last 3 months

· Odisha is the largest iron ore producing state with a share of over 50% (~100-105 MnT). Out of total production 75-80% comes from merchant mining