Posted on 09 Sep 2025
The Indian government is moving to double domestic iron ore production to curb imports and cut steelmaking costs.
Kallanish notes that officials are pushing mills to use their full capacity in allotted mines.
Commerce and industry minister Piyush Goyal and coal and mines minister G Kishan Reddy recently chaired a meeting with steel producers. Companies were told that lower ore costs would reduce steel prices.
Officials also set aggressive export targets as production rises.
Currently, utilisation in allotted mines stands at 50-55% of capacity. Private company usage remains unclear, but public sector units such as SAIL, NMDC, and Odisha Mining Corporation face scrutiny. Regulatory hurdles prevent PSUs from fully using capacity.
A market source says, “SAIL and NMDC output is far below private peers like ArcelorMittal and Rungta Mines. Companies have been asked to surrender underutilised mines, with show-cause notices issued. Rising auction bid prices are another concern, with some firms realising rates exceed potential revenue.”
“New mines will only be allotted once earlier capacities are fully utilised,” a government official said. Some restrictions on ore sales may be lifted, while SAIL has flagged additional royalties on sales as a cost issue.
Large PSUs are tasked with ensuring domestic supply to lower costs. State governments are being urged to plan future auctions carefully. The environment ministry is working to reduce clearance times.
Industry sources say the government push reflects broader concerns over cheap Chinese steel entering the market. Officials hope that higher output, efficient mine use, and better domestic supply will strengthen India’s self-reliance and boost export potential.
Source:Kallanish
