Steel producers have demanded that the government must make an effort to auction off iron ore leases after the revision of Mines Mineral Development and Regulation (MMDR) Act as iron ore rates in domestic markets have not declined.
According to global trading websites and the International Monetary Fund (IMF), global iron ore prices fluctuated between $60 to $187 per tonne over the past 6 years. Between January 2013 and January 2015, iron ore prices fell drastically by around 55 per cent to $67.39 per tonne due to poor demand of steel. However, the rates in Odisha, the top producer, has been declined by less than 15 per cent in the same period as miners have refused to lower their rates.
"The government at the centre and state should proactively expedite the process of auctioning new iron ore mines to steel plants giving fresh breath of life to the iron and steel sector and keeping productions going forward," said Vishal Agrawal, head of Odisha chapter of Confederation of Indian Industry (CII).
As per a resolution of the state steel and mines department, half of the minerals produced by merchant miners are to be supplied to local steel producers without having captive mine, at a rate decided by the government.
However, the steel makers often complain that the mine owners are manipulating the government guidelines and refusing to lower iron ore rates, which should have been in the range of Rs 1,500 per tonne on the backdrop of meltdown in international prices.
The state government today decided the Odisha Mining Corporation (OMC) should set aside 70 per cent of its iron ore production for local steel producers. Earlier, 50 per cent output of the state-run miner was reserved for the domestic end use industries. OMC produces nearly two million tonne iron ore every year.