With their mining leases due to expire by March 31, 2020, merchant miners in Odisha have urged the state government to grant them storage licenses to store iron ore beyond the validity period of their leases.
As per statutory provisions, miners are allowed to store and move their ore for a period spanning six months from the date of lapsing of their lease validity. If any material remains accumulated beyond this time frame, its ownership will get automatically transferred to the state government.
But with over 100 million tonnes of stockpile of iron ore still piled up at the mines heads, miners are vexed about its liquidation. The ore is of baser grade fines and the inventory has grown because there are no takers for it in the domestic market. Exports are the only outlet for such ore but outbound shipments are viable only when international prices are buoyant. But of late with global seaborne iron ore prices mellowing, miners in Odisha are bleak about export potential and hence, are exploring options to store the ore.
“The state government through a previous notification has allowed the end-user industries located within Odisha to create facilities for iron ore storage till March 2022. We have appealed to the government that similar provisions should be made available for the merchant miners as well since it does not appear feasible to clear a huge inventory within six months of March 2020”, said a leading standalone miner.
Realizing the need to build an inventory of iron ore in the light of expiring blocks, Odisha’s steel & mines department on July 24, had issued a notification to provide storage licenses for iron ore to be stored in intermediate stockyards.
The state government has invoked the powers under Rule 10 B of Odisha Minerals (Prevention of Theft, Smuggling & Illegal Mining and Regulation of Possession, Storage, Trading and Transportation) Rules, 2007 to permit storage licenses valid only for iron ore.
“The stockyard will be used only for the storage of iron ore meant for captive use of the licensee in its plants located within the state and shall not be despatched for trading purposes or for export outside the state. All the requisite clearances and approvals as required by law shall be obtained and maintained by the licensee”, the government notification read.
In Odisha, 16 merchant mines with approved permits to mine 79 million tonnes of iron ore are expiring by March 31, 2020. The lapsing of these mines will knock off 55-60 million tonnes of iron ore supplies from the markets. Odisha’s iron ore output is crucial since it is predominantly used by end-user industries within the country unlike export-oriented ore of Karnataka and Goa. Merchant supplies hold the key to operations of steel companies, notably, the non-integrated producers- 70 percent of which are dependent on a steady stream of supplies from the commercial miners.
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