Non-integrated steelmakers set to pay 15-20% more for iron ore from FY21

Non-integrated steel players are headed for higher cost of operations from FY21 post the lease expiry of merchant mines as their iron ore sourcing cost is expected to escalate by 15-20 per cent.

Bereft of captive iron ore resources, the non-integrated producers bank on merchant supplies to sustain their operations. Such steel companies have a dominant role in the country's crude steel output since they contribute three-fourths to the annual production.

"After the lease validity of merchant mines ceases on March 2020, there will be a spell of shortfall in iron ore. Assuming that the premiums at auctions of iron ore blocks