Iron ore production in India crosses 200 million tonnes after 7 years

Output reached 210 mt, mostly on increased production in Odisha and Karnataka. This is 9% higher than 192 mt in 2016-17

Iron ore production in India in 2017-18 crossed 200 million tonnes after seven years. Output reached 210 million tonnes, mostly on increased production in Odisha and Karnataka. This is 9 per cent higher than the 192 million tonnes in 2016-17.

“The state-wise data is yet to be compiled. The country has produced 210 million tonnes of iron ore in 2017-18,” said an official of the Federation of Indian Mineral Industries (FIMI). 

India had produced more than 200 million tonnes in 2010-11 at the height of a mineral boom before the clampdown on illegal mining in the country by the Supreme Court. Reduction in imports by China had also led to a slump in iron ore production. 

Odisha, which accounts for 50 per cent of national output, produced 105 million tonnes of iron ore and despatched 125 million tonnes in 2017-18 against 102 million tonnes and 120 million tonnes, respectively, in the previous fiscal year.

Similarly, higher output in Karnataka has been attributed to the Supreme Court’s relaxations of the cap on iron ore excavations for Category A and B mines.

The court had shifted the cap from 30 million tonnes to 35 million tonnes in its order in December last year. 

Though the court has cancelled renewed leases of 88 mines in Goa, halting iron ore extraction activities in the state from March 15, the action did not have much impact on overall ore output in the last financial year, said an analyst.

State-owned National Mineral Development Corporation (NMDC) had a flat growth rate in iron ore output at 35 million tonnes in the last financial year.

During the year, the closure of large mines in Odisha on account of not paying compensation for excavating more than what forest and environment approvals allowed had created concerns of a shortfall in production and raised the ore prices on fears of supply constraints. 

Between October 2017 and January 2018, iron ore prices had moved up as much as 60 per cent.

But the situation improved when the mines resumed operations after paying compensation. Not only did the supply situation improve, ore prices saw some correction in March and April this year. 

Restrictions on mines capable of producing over 30 million tonnes of closed iron ore capacity have been withdrawn in the past couple of months in Odisha, which earned more than Rs 60 billion as mining revenue, its highest ever.

“Miners in Odisha have environment clearance for annual output of 142 million tonnes. So this fiscal year may see a further ramp-up in production,” said an executive of a mining company.