Odisha Mining Corporation, a government of Odisha undertaking, became the largest merchant miner in the state of Odisha in financial year 2020-21 (FY21) with 13.30 million tonnes (mn t) of production against 12.38 mn t in the previous fiscal (FY20), a growth of 7% year-on-year.
What’s more, the miner may also become the top-most producer in the state by FY22, with a consolidated capacity of 34 mn t with a slew of new mines having already come into production and with plans to expand output further in the next fiscal.
What makes OMC largest merchant producer in Odisha?
New mines become operational: OMC commenced operations at two of its mines, Tiringpahar and Gandhamardan B, in 2020. Production at Gandhamardan B started only in 2020 and was recorded at 6.42 mn t while the EC limit is 9.12 mn t.
Production from Tiringpahar began in 2020, after the mine’s lease period was extended to 2034. Its production in FY21 was 1.28 lakh tonnes while the EC limit is 0.33 mn t.
Both the new mines have contributed to boosting OMC’s overall output. In FY21, iron ore output from its existing Koira, Gandhamardhan A and Daitari blocks were at 2.70 mn t, 6.60 mn t and 3 mn t respectively.
Rungta’s production drops: On the other hand, production from leading merchant producers like Rungta Mines, Serajuddin and Essel Mining declined 66%, 76% and 56% respectively in FY21. Rungta, in fact, had been ahead of OMC in FY20 with almost 30 mn t of production. However, its production plunged the next fiscal, with many of its mines going to new lessees after the auctions in 2020, allowing OMC to go past it.
JSPL, Shyam Ores mines allocated: OMC also received two additional mines in the form of Guali and Jilling-Langalota which were given to it by the government after the respective bidders, JSPL and Shyam Ores, failed to commence operations due to disputes and other constraints. The two mines have a combined EC limit of 12 mn t/year, which get added to OMC’s existing 13.30 mn t. Although, OMC’s potential capacity is even higher, the expected production next year could consequently be over 25 mn t.
This volume may give it a head start over captive miners Tata Steel which had a production volume of 21.33 mn t in FY21 and JSW, at 16.66 mn t.
It may be recalled that JSPL had won the Guali mine at the Odisha auctions in early-2020 by promising to pay a premium of 144%, while Jharkhand-based Shyam Ores had bagged Jilling-Langalota for a premium of 132%. These two mines were allotted to OMC under the new mining reforms for a period of 10 years and the miner is required to pay a premium of 1.5 times of the royalty (equivalent to 22.5%) for these two mines.
Odisha’s share in India’s iron production
In FY21, in India’s overall production of 207 mn t of iron ore production, Odisha contributed 111 mn t, a straight 34 mn t decline compared to FY20. This was because production by the leading merchant miners in the state nosedived in FY21. Serajuddin, Essel Mining and Rungta Mines witnessed y-o-y decline in production by 76%, 56% and 66% respectively. Collectively, these three miners produced around 35 mn t less in FY21 compared to the previous fiscal.
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