Bhubaneswar | Jul 05, 2016: Riding on recovery of global iron ore prices and uptrend in consumption of ore in the domestic market, Odisha is aiming at an output of 120 million tonne this financial year. The projected output, if achieved, would mean a spurt of 50 per cent over 80.86 million tonne that the state produced in last financial year.
Odisha is the largest iron ore producing state and its ore production went up nearly 50 per cent in 2015-16 from 47 million tonne (mt) to 80.86 mt. This came on the back of the state government's swift orders to extend the validity of mining leases after the enactment of the amended Mines and Minerals-Development & Regulation (MMDR) Act.
"Odisha has recorded one of the fastest growth in iron ore output in last financial year and has the potential to cross the 100 mt mark in production in this financial year", Union Mines Secretary Balwinder Kumar had said at a recent conference.
Also, with the Supreme Court directing the state government to reconsider cases of 102 shut mines is expected to give a fillip to production once these mines resume operations. The reopening of such mines is expected to augment output by up to 40 mt.
"The state government has already extended the validity of over 60 mines. More mines are expected to restart operations later in this financial year. We are hopeful that iron ore production can touch 120 mt if miners produce up to the optimum limits. We are also encouraging the merchant miners to cater to export markets after meeting the requirement of domestic end use industries", said a government official.
Pan-India iron ore production moved up 20 per cent last financial, rising from 129 mt to 155 mt. Market estimates have put this financial year's iron ore production in the country to be in excess of 180 mt.
In Odisha, merchant miners have the approved EC (environment clearance) limit to produce 155 mt. But they were producing way below the approved limits as there was lack of adequate demand in the country. Also, exports of the ore were un-remunerative with exporters barely able to recover their cost of production two to three months back.
However, miners were upbeat over the changing dynamics. Recovery in global prices and parity in export and domestic tariff for iron ore has made exports a profitable business lately.
"For 62 per cent grade iron ore, we are getting $2-2.5 a tonne from exports. The realisation from low grade ore (with iron content below 58 per cent) is even better with margins of around $5 per tonne", said an official with a standalone mining company.
In 2015-16, the country shipped six mt of iron ore, marking a growth of 25 per cent in exports. Towards the end of last financial year, exports of iron ore, especially the lower grade had gathered steam after the Union government lifted the 30 per cent export duty in 2016-17 Budget.
(Source: http://www.business-standard.com/)