- Odisha projected to raise output by around 9% on-year
- Major miners have capacity expansion plans on anvil
- NMDC’s Kumaraswamy mine coming for renewal in Oct
Production of iron ore in India is expected to increase to nearly 265 million tonnes (mnt) in financial year (FY’23), as per SteelMint estimates. Our projections, based on calculations of state-wise and mine-wise enhancement in capacity and production, show that the country’s iron ore output in FY’23 is likely to rise 5% year-over-year from to an all-time high of 251 million tonnes in FY’22.
Notably, production in FY’22 increased by 23% y-o-y. However, capacity expansion proposals in the pipeline of both major merchant as well as captive miners are expected to push production higher by the end of the current fiscal, SteelMint notes.
State-wise production estimates
Odisha’s iron ore output rose by nearly 30% to over 138 mnt in FY’22 from around 107 mnt in FY’21. Odisha’s share in India’s iron ore production stood at around 55% in FY’22.
SteelMint estimates that production from Odisha is likely to increase further to 150 mnt in FY’23, or an increase of nearly 9% on-year. This is likely to be possible on higher output by JSW Steel which is expected to post total production of 27 mnt. JSW has retained all the four mines it won at the 2020 Odisha auctions and is expected to receive EC for expanding capacity at some of them.
On the other hand, OMC’s production should be around 30 mnt, higher from 27 mnt in FY’22. OMC is planning to start production from the Khandbandh, Banspani, Unchabali and Dubna Sakradihi mines, which are closed for many years, after getting necessary clearances from the government.
While Tata Steel could ramp up production from the Joda East mine, Vedanta-owned ESL Steel has recently commenced production from the second mine it won at the second phase of Odisha auctions in 2021.
Production from Chhattisgarh should be around 43 mnt – largely stable y-o-y – with NMDC accounting for around 30 mnt. Karnataka is expected to post total iron ore production of over 41 mnt in FY’23. The lease of NMDC’s Kumaraswamy mine will expire in Oct’22, and, if the validity of the 7 mnt/year lease is extended, production will resume as usual. Otherwise, production might decline. NMDC’s 7 mnt/year Donimalai lease was extended on condition of payment of additional royalty to the state government.
Production from Jharkhand should be around 25 mnt, largely from the captive mines of steel majors Tata Steel and SAIL. If Tata Steel gets clearance to expand its Noamundi iron ore mine, production is likely to go up.
Major miners
India’s leading iron ore miner NMDC is likely to emerge as the top producer this fiscal with an output of around 43 mnt. NMDC targets to raise production to over 70 mnt by 2025 mainly by gaining access to new deposits adjacent to its existing operations in Chhattisgarh. NMDC’s production increased by 23% y-o-y to over 42 mnt in FY’22 from around 34 mnt in the preceding fiscal.
SAIL’s total output should be over 35 mnt from its mines in Odisha, Chhattisgarh and Jharkhand. JSW Steel is expected to log total production of over 33 mnt, with 27 mnt of the total volume coming from its mines in Odisha. Tata Steel, on the other hand, should post total figures of around 33 mnt.
Notably, after raising production sharply by over 100% y-o-y to 27 mnt in FY’22, OMC is likely to increase production further to 30 mnt in FY’23, SteelMint estimates.
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