Odisha bends norms on iron ore output cap

Decides to separate captive mining from 57 mn tonne cap

The state government has decided to exclude iron ore produced from mines owned by steel makers from its 57 million tonne annual iron ore cap imposed in Joda and Koira mining circle, in order to boost production by nearly 15 million tonne a year.

The decision to not consider mineral dispatches from captive mines was taken recently in a State Level Task Force meeting, said a government source.

“The decision was taken because in 2012-13, when the cap was 52 million tonne, annual iron ore output rose to 62.3 million tonne as steelmakers with captive mines continued production as per their own need and mining plan. The new norm will allow more production from standalone iron ore mines,” said the source.

Tata Steel, Steel Authority of India Ltd (SAIL), Jindal Steel and Power Ltd (JSPL) and Adhunik Metaliks have captive iron ore mines in the state for their steel mills inside and out of Odisha. They produce nearly 15 million tonne iron ore per year.

“With the captive production removed from cap, total output of Odisha could go up to 72 million tonne per year,” said an iron ore miner without wishing to be named.

In 2011-12, iron ore output in the state was 66 million tonne, down from 75 million tonne previous year. To minimise rampant mining and for sustainable use of the mineral resources, the state government in 2012-13 proposed to cap output at 52 million tonne.

However, when the production surpassed by the end of the year, the state revised the cap to 57 million tonne for current fiscal including captive consumption. The recent changes in norm was taken to boost output as it has witnessed a drop, data showed.

By December 2013, iron ore output came down to 40.05 million tonne against a total production of 42.97 million tonne during same period in 2012-13.

Besides higher export tariff and transport restrictions, lower mineral production in the state has been also attributed to mandatory sales of half of the mineral for state-based steel millers. While the state has the capacity to produce 80 million tonne a year, annual need of local steel mills amounts to 16 million tonne, leaving more ores unsold than marketed in local markets. At present 31 iron mines, 12 manganese mines and 20 iron & manganese mines are working in the state.