- Odisha output inches up 85% year-on-year
- More than 20 mn t of capacity to be added in FY’22
Iron ore production in India in the Apr-Sep’21 period stood at 120.82 million tonnes (mn t), as per month- and state-wise data maintained with SteelMint. Production recovered significantly compared to last year, with production from Odisha – India’s largest iron ore producing state – increasing by 85% year-on-year.The country’s iron ore output fell to around 204 mn t in FY’21 compared to more than 245 mn t in FY’20, as per SteelMint data.
Odisha output rises
Odisha’s share in the country’s total production in the Apr-Sep’21 period was 58%. Production from Odisha during the period reached 70.86 mn t, while Karnataka produced 19.91 mn t. Production from Chhattisgarh and Jharkhand were recorded at 16.62 mn t and 10.43 mn t, respectively.
Notably, iron ore production in the first six months of FY’22 increased by an impressive 54% compared to the corresponding period of the last fiscal. Production in Apr-Sep’20 had shrunk to just 78 mn t.
Except Odisha, however, production volumes from the other states have been only marginally higher this year compared to 2020.
The long delay in operationalisation of auctioned iron ore blocks in Odisha last year led to heavy losses in production. This accounts for the sharp y-o-y rise in volumes from the state this year. Of the 19 auctioned iron ore blocks in 2020, 16 started operations in a staggered manner, often failing to meet required despatch targets fixed by the government. This led to a drastic fall in mined volumes.
In comparison, monthly iron ore production figures from Odisha in the first six months of FY’22 have been particularly robust, peaking to nearly 15 mn t in May. However, production declined to 10.7 mn t in Aug and 7.4 mn t in Sep on seasonal factors, especially an extended monsoon impacting mining operations and logistics. Nevertheless, total volumes from Odisha this fiscal is expected to be close to 145 mn t that was recorded in FY’20.
Production volumes of key miners – India’s largest iron ore miner – NMDC reported best ever H1 output at 17.7 mn t, up by 44% y-o-y. Odisha’s state-run PSU miner Odisha Mining Corporation (OMC) reported output of 10 mn t in H1 FY’22. Both Jilling and Guali were added to OMC’s kitty in 2020 following months of non-production after the Odisha auctions which have boosted production volumes.
Other key miners like SAIL, Tata Steel, JSW Steel have also reported increase in output in the said time frame.
In early Sept’21, AM/NS India commenced operations at the Ghoraburhani-Sagasahi (Sagasahi) iron ore block in Odisha. The mine has an EC limit of 7.16 mn t/year
Capacity addition
SteelMint reported earlier that India’s iron ore capacity is set to increase by 21.14 mn t in FY’22. Of the new environment clearances (ECs) that have been issued for the current financial year, 15.14 mn t – or nearly 72% of new production expected to come online – is from captive iron ore mines. The country’s total iron ore EC capacity stands at around 370 mn t, SteelMint data shows.
Leading integrated steel companies as well as state-owned merchant miners have applied for enhancing existing capacities significantly. A state-wise analysis of iron ore capacity addition in FY’22 shows that an overwhelming 80%, or 17.06 mn t, is set to be added from Odisha. Chhattisgarh and Karnataka are expected to account for 2.9 mn t and 1.8 mn t, respectively, of capacity enhancement in the current fiscal.
However, key merchant iron ore leases totalling about 12.15 mn t of production on an annual basis expired in Odisha recently. So, while over 17 mn t of new EC capacity comes online in the state, more than 12 mn t of existing capacity expires.
The second phase of mineral block auctions in Odisha in Aug-Sep’21 saw 10 iron ore blocks, of which six were greenfield, fetching high premiums from some of the leading firms in the iron and steel sector. According to Odisha government sources, production from the state is expected to be more than 140 mn t in FY’22.
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