Odisha bullish on mining revenue as Iron Ore production, exports rise

Bhubaneswar: With increase in Iron Ore production and exports, Odisha government is optimistic about rising mineral revenue in the current financial year.

Due to a weakened commodity cycle and strict Covid control measures in China, which is a significant export market, export orders decreased starting in May 2022. Furthermore, the Indian Government imposed strict export duties on steel making commodities, including high-grade ore, resulting in a decrease in Non Tax Revenue collection from the Metal Sector.

However, after the withdrawal of iron-ore export duties, officials have said that exports have increased in the State. Domestic iron ore prices are also on the rise, which is expected to increase production and dispatch.

In 2021-22, Odisha produced 147 Million Ton of iron ore, and until January of this year, 124 Million Ton of iron ore was produced, which is on par with the previous year. Officials report that despatch permissions for 140.64 Million Ton of iron ore were issued in 2021-22, of which 8.95 Million Ton was for export purposes, accounting for 6.4 percent of the total despatch quantity. Until January of this year, 112 Million Ton of despatch permissions were issued, with exports accounting for 4.18 Million Ton.

In May 2022, the Indian Government imposed a flat 50 percent export duty on all grades of iron ore and 45 percent on iron ore pellets, resulting in a sharp decrease in demand for iron ore exports and from the pellet industry. Between June and November 2022, iron ore despatches and exports in Odisha dropped significantly, with a meagre 0.57 Million Ton despatched during this period.

However, iron ore despatches and exports have picked up again since the withdrawal of export duties in November. In December and January alone, iron ore exports rose to 2.54 Million Ton, and officials anticipate that overall iron ore despatches will reach around 140 Million Ton by the end of March this year.