Odisha miners get notices for producing iron ore below environment clearance limits

With below par production impacting royalty collection, the respective deputy directors of mines have issued showcause notices to the miners in Joda and Koira

Odisha, the biggest iron ore producer, has launched a crackdown on iron ore miners for producing way below the approved environment clearance (EC) limits.

With below-par production impacting royalty collection, the respective deputy directors of mines have issued showcause notices to miners in Joda and Koira, the two areas accounting for 80 per cent of the state’s iron ore output. The mines department has asked for an explanation from the lessees on the reasons for the low production. “We may take punitive action if the miners continue to produce below the EC limits,” said an official at the department of mines (Odisha).

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Now, 47 iron ore mines are operating in Odisha on 143 leases. The combined EC limit of these 47 leases is 156 million tonnes (mt)-48 mt for captive mines and 108 mt for merchant miners. But only 62.55 mt of iron ore was produced till the end of January.

Manish Kharbanda, executive director and group head (mines & minerals), Jindal Steel & Power Ltd, said, “Out of EC limit of working iron ore mines in the state of about 156 mtpa, the dispatch of about 74.5 mt have already been achieved till March 10, 2016.  This is over 1.5 times the production on an year-on-year basis, but it is only 47 per cent of the EC limit. Even after enhancement in production and dispatch, the prices of iron ore fines are not competitive to the prices of pellets and other end-use products.”

He suggested that production of state run Odisha Mining Corporation (OMC) needs to be enhanced up to the EC limits.

Of its approved EC limit of 15.48 mt for this fiscal, OMC has despatched only 2.14 mt till December 2015. Similarly, Rungta Mines, a large merchant miner has despatched 10.34 mt by the same period, barely a third of its approved EC limit of 39.06 mt.

Most of the mines in Odisha are concentrated in the hands of a few large merchant miners whose production influences iron ore pricing in the state. This is in contrast to steel industries and pellet makers, most of whom are operating without captive leases and are dependent on the merchant miners or OMC to feed their plants.