Odisha allowed to increase iron ore output by 16.5 mt

The move will not affect the overall cap set by the state government, currently at 58 mt a year

The Union environment ministry has approved a proposal from the Odisha government to allow the request of two iron ore mining groups to raise their output by a combined 16.56 million tonnes (mt) a year.

This would not affect the overall cap set by the state government, presently at 58 mt a year. The two groups are Rungta Mines (two mines) and Serajuddin & Co (one mining lease). The Rungtas have now got environmental clearance (EC) to extract an extra 5.91 mt of ore a year; their cap till now was 3.5 mt. Serajuddin can now extract up to 15.15 mt a year, against 4.5 mt till now.

The Centre’s nod should double the monthly iron ore production target of the state to 12 mt in the three months which are left in the ongoing financial year. However, government officials are not sure whether the target can be achieved.

“For December, the target was set at 6.9 mt and actual production was 2.6 mt,” noted a senior government official in the know.

Iron ore output in Odisha was hit in May last year, when the Supreme Court ordered the shutdown of 26 mines operating without a valid lease. The state government has allowed operation of eight mines and eased restrictions on sale of old stock.

The upgraded EC adds 16 mt to the 42.36 mt of existing approvals in favour of non-captive mines. Still, traders and experts feel the non-captive ore production target cannot be achieved.

“Even if they have received the EC, it will take at least three weeks to enhance the output, after fulfilling other formalities and arranging machinery and manpower. The actual output could go up by 1-1.5 mt a month after the approval,” said a city-based consultant.

Mining output enhancement applications were sent to the Centre in November last year, after the state government planned to raise ore production to compensate for the losses arising from the SC order in May. An application from four other private mining groups to raise output by a combined 15 mt is still pending with the Union environment ministry.