Indian stockpiles of low grade iron ore fines are estimated to have crossed the 150 million mt mark as of the end of the fiscal year 2017-18 (March 31) at mine pitheads across the country, surpassing the stockpiles of 148 million mt of low grade iron ore fines recorded at the end of the previous fiscal year, according to industry estimates provided by three eastern India-based miners.
The miners said that bulk of the low grade iron ore of Fe content in the range of 58-62 percent has piled up across pitheads of mines located in the eastern Indian states of Jharkhand and Odisha as there have been no international buyers for the last several months and as Indian steel producers are not technically equipped to feed their blast furnaces with low grade fines. Close to 85 percent of the total stockpile of low grade piles are idling at pitheads in Odisha and Jharkhand, the miners added.
The three miners, two based in Odisha and one operating a mine in Jharkhand, said that any further accumulation of stocks above current levels will in the medium-term impact production from mines, even that of higher grade ores, adding that the mines' ability to dump low grade production and carry the costs of such stockpiles has been severely eroded, and at least some of the smaller capacity mines will be forced to curtail production levels early in the current fiscal year.
Pointing out that traders representing Chinese steel mills are rejecting all offers for low grade fines, the miners said that the Federation of Indian Mineral Industries, the representative body of Indian miners, will make a fresh petition to the government seeking the abolition of the 30 percent export tax on fines with Fe content in the range of 58-62 percent and thereby enable miners to liquidate stocks by sharply lowering offer levels. Currently, only fines with Fe content below 58 percent are subject to a zero export duty rate.