India fast-tracks Odisha mines to ease ore shortage

Posted on 19 February 2021

India has inaugurated production at two new iron ore mines in Odisha in order to help ease the shortage of iron ore in the country.

The Jiling-Langlota iron ore block and Guali iron ore block were reserved for state-owned Odisha Mining Corporation (OMC) within 25 days of Odisha authorities making a request to the central government. The mines have a combined 1.5 million tonnes/month production capacity and possess 275mt of reserves.

“These mines will help in stabilising the supplies for small industries and will generate huge employment opportunities in the state,” says Indian mines minister Pralhad Joshi. The two mines will generate INR 4,000-5,000 crores ($551-689 million) of revenue for Odisha, he adds. He also requested the Odisha chief minister bring more mines to auction and commence production at all non-working mines.

Indian iron ore production fell 12% on-year in December 2020 to 20.9mt as production ramp up delays continued at mines auctioned last year in Odisha. Indian chrome ore output meanwhile fell 38% to 236,000t and manganese ore production by 14% to 275,000t.

JSW Steel said last month its crude steel output in the fiscal year through March 2021 will fall some 5% short of guidance due to domestic iron ore supply disruption (see Kallanish passim). Credit rating agency Crisil said last month only 6-7 of the 19 auctioned mines in Odisha had begun mining operations, most of which were won by steelmakers for captive consumption. The iron ore shortage has spurred multiple price hikes and seen domestic mills request for ore export restrictions.

Earlier this week, meanwhile, BHP said prospective Indian iron ore miners’ balancing act between domestic market needs and attractive export sales is an uncertainty for the global iron ore market in 2021.

Source : Kallanish