The Government of Odisha has asked the State’s iron ore merchant miners to supply half of their mined lumps and fine to local standalone units.

Early this month, it directed merchant miners to allocate 50 per cent of the ore to the units without captive mines. The Government also formed an inter-ministerial committee for formulation of policy for long-term ore linkages to these ore-based units.

A senior State Steel and Mines Department official told Business Line that the Government at present focussed on regulating the merchant mining. “Value addition and linkages to the producing units are the targets,” said the official.

On December 5, in a communication to Director of mines, Rajesh Verma, Principal Secretary to the Odisha Government, authorised Deputy Directors of Mines and other circle-level mining officials, to monitor and implement the directive “with immediate effect.”

It also learnt that the ministerial committee would meet on December 18 to review the implementation and discuss the issues involving supply of iron ore to State-based plants, including sponge-iron units.

Steps are restrictive

According to the apex mining industry body FIMI, the State Government’s steps are “restrictive.” FIMI President, H.C. Daga, said neither MMDR Act nor the national mining policy allows such steps. “The State Government may face challenges if it presses ahead with its moves,” Daga added.

According to the Principal Secretary, the steps are in line with the provisions of the Mineral Concession Rules, 1960.

R. L. Mohanty, President of the Eastern Zone Mining Association, said there are around 47 iron ore miners in Odisha, of which, 12 are not in operation now for regulatory or environmental reasons.

The Government said the merchant steel mills or sponge-iron units faced low utilisation or closure due to the “acute shortage” of ore. The State has 104 sponge-iron units.

“At present, hardly 10 per cent of their ore production is made available to local units at a cost 10 times higher than that for a unit having captive ore source,” said P. L. Kandoi, President of the Orissa Iron Manufacturers’ Association.


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