Iron ore shortage, if any, due to Odisha's faulty policy: FIMI

Says since the requirement of the steel industry in Odisha is not enough to consume even 50% of the ore produced in the state, stockpiles of the resource are lying at mine heads

Refuting allegations by steel makers of a shortage in domestic iron ore supply, miners body FIMI has said a paucity in some regions is not because of the inability to produce more but due to a faulty policy of Odisha state.

There has been surplus availability of ore since 2004-05, the Federation of Indian Mineral Industries (FIMI) said in a recent presentation to the Commerce Ministry. "It is significant that despite no new major mine having been opened in the last 20 years, production of iron ore has kept pace with the rising domestic and export demand. In other words, existing mines have the capacity to increase production as per demand," it said. Domestic iron ore production has been on the wane and declined to about 129 million tonnes in 2013-14 from 213.25 million tonnes six years ago. "In case there is any shortage of iron ore in any part of the country, it is not because of incapacity of industry to produce more but because of faulty policy of Odisha government, which does not allow transport of more than 50 per cent of the total production out of the state," FIMI said. Odisha is the largest producer of iron ore in the country. The miners' body said since the requirement of the steel industry in Odisha is not enough to consume even 50 per cent of the ore produced in the state, stockpiles of the resource are lying at mine heads.

At the end of 2012-13, 69 million tonnes of iron ore, mainly fines, were lying at mine heads. Domestic steel makers have often alleged a shortage in the key steel-making raw material and have sought a ban on iron ore exports on apprehensions the country may run out of the mineral if widespread overseas shipments continue. About 1.6 tonnes of iron ore is needed to produce one tonne of steel. "Crude steel production using iron ore is increasing at a snail's pace to warrant any apprehension about the shortage of iron ore in the country," FIMI said.