Odisha iron ore output tumbles 40% in 2014-15

Output dropped to 47.35 million tonne, lowest in last 10 years

Top iron ore producer Odisha witnessed sharp decline in iron ore production in last financial year as output dropped to 47.35 million tonne (mt), lowest in last 10 years, due to closure of key mines after Supreme Court order in May 2014. Output is even lower that the cap decided by the state for iron ore at 57 million tonnes. In 2013-14, the production topped 78 mt, including excavation by steel plants with captive iron ore mines.

In the last fiscal, the state government had set a target of at least 57 mt production from operating mines. But when the Supreme Court ordered that mines which have completed 50 years of operation since lease grant must halt production, 26 large mines had to halt operation immediately, affecting nearly 35 mt annual output.

Even as the government allowed operation of eight mines by invoking special provisions mentioned in the rules amid fears of declining royalty soon after the court order, it had estimated that total output would not be more than 43 mt.

In September and October last year, three more mines were asked to stop excavation by the government based on the top court order.

Anticipating losses in mining revenue collection, the state government in November 2014 had requested Centre for allowing mining output enhancement applications of four mines totalling 16 million tonne as output restrictions on large iron ore mines has resulted in Rs 900 crore deficit in collection target set for mining revenue upto October.

Though output went up to 47.35 mt surpassing government estimates, during 2014-15, iron ore despatches recorded by the Directorate of Mines was 52.67 mt.

"The despatches include transportation of ore stocked from previous fiscal," said a government official.

As the government was expecting a drop in iron ore output, it had directed all mining circle heads to encourage lease holders for meeting the dispatch limit of current financial year set by the steel and mines department. It had estimated around 15 mt despatch by allowing transportation of previous year stocks.

The government expects production to rise from this year onwards as it is in the process of allowing shut down mines to resume operations based on new Mines Minerals Development and Regulation (MMDR) Act. It has also set up a committee to fix iron ore production target for current fiscal.