Steel Industry may face Iron Ore scarcity due to expiry of Mining Leases, Steel Ministry asks states to prepare action plan
Bhubaneswar: With the mining leases of 232 iron ore mines slated to expire by 31st March 2020, the mining industry fears a possible Iron Ore scarcity in the country. Keeping this in mind, the ministry of steel, GoI has requested Iron Ore producing states like Odisha to prepare an Action Plan.
“An Action Plan is needed to overcome the shortage of iron ore due to likely disruption to occurred as more than 250 Iron Ore Mining Leases are expiring on 31 March, 2020”, said Binoy Kumar in his letter to the Ministry State Governments.
The Federation of Indian Mineral Industries (FIMI) has recently predicted that due to the expiry of 232 Iron ore mines there could be an Iron Ore scarcity in the Country which could impact the steel industry. Expressing concern over the matter, major Steel Makers have approached Union Government to help them out as crisis of raw material shortage is looming large.
About 70 per cent of the country’s steel plants do not have captive iron ore resources and are, hence, dependent on supplies by merchant miners. Any uncertainties in supply or pricing of the ore would significantly impact the steel sector’s production and profitability.
According to estimates there could be a shortage of over 50 Million Tons of iron Ore as major mining Leases are ending on 31 March, 2020 and during 2020-21 there will be acute shortage of principal raw material for the Steel Plants.
The dearth of domestic iron ore supply will necessitate an increase in the import of iron ore mix. This will potentially lead to an increase in the cost of production, officials admit, adding this is a cause of concern. Besides, operations of smaller companies that are away from ports and operate in the landlocked region could be disrupted as they are primarily dependent on domestic merchant miners for iron ore.
While Ministry of Steel is requesting Odisha, Goa, Karnataka, Chhattisgarh and other mineral rich states, Ministry of Steel is time and again reminding Odisha to get ready with arrangements to help out the steel makers.
According to sources, Government of Odisha is chalking out an Action Plan to meet the situation apart from, expediting the process of auction of iron ore mines. 12 Iron Ore Mines will undergo through the auction process and it has already started, officials admit, adding there will be no delay in auction process.