At least three industry bodies, all related to steel-making, have written to the Steel Ministry over the last one month requesting its intervention to sort out iron ore shortages to the tune of 50 million tonnes (mt).

The shortage is to the tune of 3.35 – 4 mt per month, as per industry estimates.

Iron ore is a key steel making raw material.

Industry bodies – two based out of Kolkata and the third from Delhi - have sought resumption of auction from SAIL’s mines in Jharkhand; renewing and resuming auctions process of lapsed mines in Jharkhand; improving performance of already auctioned mines in Odisha and resumption of operations of RINL of OMDC, among others.

A cap on export of low grade iron ore fines have also been sought so as to enable beneficiation. India’s iron ore exports have been steadily rising since China opened up, earlier this year, and the Centre withdrew an export duty in November 2022.

While two of the letters are addressed to the office of the Steel Secretary, the third is addressed to the Union Minister of Steel.

Auction from SAIL’s mines

The letters, reviewed by businessline, mention that there is scope of improving availability if the PSU steel-maker (SAIL) sells the 60 million tonne of low-grade mineral lying unutilised across two of its captive iron ore mines. While the stock at Gua mines is pegged at 32 mt, the stock pile at Kiriburu/Megathaburu is 28 mt. The fines there have an iron content of 58 - 60 per cent.

“SAIL is understood to have floated EoI for sale of dump material but it could not materialise because of delay in obtaining clearances,” the letter by the Pellet Manufacturers Association of India (PMAI) said.

According to the Merchants’ Chamber of Commerce & Industry’s letter: “Selling these dump fines ..... will also generate revenue of ₹13,000 cr for Govt of Jharkhand and Centre.”

The industry associations have also said auction process for transfer of eight-odd iron ore mines is “yet to resume” in Jharkhand. Auctions “at the earliest” would lead to an estimated capacity addition of 10.6 mtpa (million tonnes per annum. These idle blocks include NKPK (0.3 mtpa), Core Minerals (3 mtpa), Megathaburu (1 mtpa), RJM (1.5 mtpa), Ghatkuri (2 mtpa), among others.

Odisha Mines

Kolkata-based Steel Re-Rolling Mills Association of India also referred to Odisha-based mines which are lying un-utilised.

These mines have either not begun operations or are operating much below their estimated capacity limits, it stated. At least four mines – lease expired for three mines and dispatch lower than approved capacity for the fourth – have been mentioned, with a combined estimated capacity of 26.66 mtpa.

Fastracking approval to allow Odisha Mining Corporation to mine up to 30 mtpa at the Guali iron ore mines, from the current 5.7 mtpa, will help ease supply shortages for the secondary mills, it was said.

Resumption of operations of RINL-controlled mines of OMDC Ltd (acquired by the company in 2011) could lead to addition of 15 mtpa of iron ore, it further said.

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