 "Mining, Iron ore")
The Federation of Indian Mineral Industries (Fimi) has stressed iron ore production by non-captive miners in Odisha be carried out in line with approved environment clearance limits.
As the leases of standalone miners were valid only up to 2020 (according to the amended Mines & Minerals Development & Regulation Act), production from their mines had to be maximised by extracting in line with approved environment clearance limits, not the mining plan formulated by the Indian Bureau of Mines (IBM), it said.
“You will appreciate that no mine owner would like to restrict the production of iron ore even if he makes a marginal profit. Except in the case of lump, where there is marginal profit, fines are being sold almost at the cost of production (including royalty and other taxes). Further, no mine owner would like to produce less, even if one is making a marginal profit, taking into consideration the fact that the remaining life of the mine is only four and a half years,” Fimi Secretary General R K Sharma wrote to Union Mines Minister Narendra Singh Tomar.
The IBM’s mining scheme, spread across five years, is based on assumptions such as the estimated domestic and foreign markets. However, Fimi has said the domestic steel sector is facing competition from imports, adding there is hardly any export market for iron ore.
Manish Kharbanda, executive director and group head (mines and minerals), Jindal Steel & Power Ltd, said, “The IBM approves the mining scheme and ensures the environment clearance limit is not crossed every year. This provision should not be misconstrued and applied for commercial gains. If miners find the market not conducive and produce lower than the specified environment clearance limit, taking the veil of IBM approval, strict punitive action should be initiated.”
A source said, “At a recent meeting, the state steel and mines secretary gave directions to non-captive miners to produce iron ore according to the approved environment clearance limits. He also warned of punitive action if the production target was not met.”
As of now, overall consumption of iron ore in Odisha by steel firms and sponge iron and pellet makers is 25-30 mt a year, against the approved environment clearance limit to produce about 200 mt. The Odisha government does not allow the sale of more than 50 per cent of total iron ore production by non-captive miners outside the state.
Despite having the capacity and environment clearances, standalone miners are unable to reach approved production levels due to piling inventory. More than 85 mt of iron ore is lying at mine heads. Of that, 10 mt are lumps.
Sharma said due to depressed international ore prices and a steep export duty of 30 per cent, iron ore could not be exported. Also, excess production from Odisha cannot be transported to Karnataka, where the steel sector is facing a demand-supply imbalance.
