India’s steel industry is likely to face iron ore supply disruptions amounting to 45-50 million mt in the fiscal year 2020-21, owing to the expiry of working commercial mines on March 31, 2020, according to a report by the Ministry of steel.
According to the report, the ministry of steel in conjunction with the ministry of mines has proposed a series of steps to mitigate the impact of this disruption on domestic steel producers.
The ministry of steel has given permission to state-run Steel Authority of India Limited (SAIL), which operates 20 captive iron ore mines across the country, to sell 70 million mt of low-grade iron ore fines lying at its pitheads. The government-owned steel producer has also been given permission to resort to free commercial sale of a maximum of 25 percent of its total incremental production from its captive iron ore mines.
The ministry of steel has also proposed to the ministry of mines a reduction of the current royalty of 15 percent to five percent on iron ore production, arguing that a lower royalty rate would provide impetus to add value to low grade iron ore fines through beneficiation and pelletization, the report said.