Iron ore output in Odisha rises 11% in Apr-Jun period

State has so far signed agreements to extend lease validity of 17 mines out of 26 mines which were asked to halt production by SC

Top iron ore producer in the country, Odisha witnessed higher output of the mineral at 14.4 million tonne (mt) during April 1-June 22 period, compared with close to 13 mt produced in the same period last year following lifting of legal restrictions on mining activities.

“Based on our weekly performance review, I can say that the situation is gradually improving. I expect the production will go up further after few months when the key mines start producing after lease extension,” said U C Jena, head of IT wing of the state mines directorate.

The state government has so far signed agreements to extend lease validity of 17 mines out of 26 mines which were asked to halt production by the Supreme Court in May last year as they did not have valid licence to operate the mines. The suspension of operation at key mines had reduced iron ore output of the state by around 40 per cent to 47.73 mt in 2014-15, the lowest in last 10 years.

However, the government hopes the production might touch 65 million tonne in 2015-16 after the dispute related to extension of lease validity has been settled after the promulgation of new Mines and Minerals (Development and Regulation) Act, 2015. “Most of the mines which have their leases extended now are expected to start production after 3-4 months as they need some time to redeploy machines, manpower and make arrangements for other necessary items required for excavation of iron ore. When the major mines restart operation, the output is going to rise definitely,” Jena added.

In the last fiscal, the state government had set a target of at least 57 mt production. But when the Supreme Court ruled that mines which had completed 50 years of operation and not granted lease renewal must halt production, 26 large mines went out of operation. 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 the Centre for allowing mining output enhancement applications of four mines which together intended to ramp up the capacity by 16 million tonne.

Also, the state mines directorate had instructed all mining circle heads to encourage leaseholders of operating mines to meet the dispatch limit of current financial year set by the steel and mines department.

For the current fiscal, the department has set up a committee to fix iron ore production target and is awaiting its report on the matter.