Indian steelmakers suggest reopening closed mines to ease domestic iron ore shortage

Monday, 05 February 2018 23:23:44 (GMT+3)   |   San Diego
       

R K Sharma, Principal Secretary Odisha Government (steel & mines) ruled out any shortage of iron ore due to the recent closure of seven working mines after December 31. The mines, with a combined annual capacity of around 20 million mt, were shut after they failed to pay the Supreme Court mandated compensation within the deadline. His views are being challenged by requests from several in the steel industry.

A miner in the region stated, "We had never expected to be fined after having paid a royalty, duties and other taxes on mining that had been done under the supervision of the Indian Bureau of Mines and state mining directorate." Sanjeev Nandwani, President, Mideast Integrated Steels Ltd said, “Mining in India is viewed as a risky business. This makes it difficult for the miners to avail credit from banks and financial institutions. This perception of deep pockets has to change. Miners need to be allowed more time to pay off compensation and make payments in installments.”

Manish Kharbanda, executive director at Jindal Steel & Power Ltd (JSPL) and chairman of Ficci's manufacturing panel suggested reopening of closed mines in the interest of the steel industry and ensuring price moderation. “Since the August 2 judgment of the Supreme Court, iron ore fines prices have been hiked 98 per cent while lumps prices have moved up 60 per cent. This is ridiculous. The price hike will need to be passed by the steel industry to the end consumers.”

Naveen Jindal JSPL Chairman Naveen Jindal added, “Except three steel companies, all others have become insolvent and have gone to the National Company Law Tribunal (NCLT) in Odisha. If the price of iron ore is not brought down, it will impact these three surviving companies, too”, Jindal said.“ JSPL has invested more than Rs 330 billion ($5 billion) at Angul. If we can’t get iron ore at affordable prices, how will the company become competitive and sustain the thousands of jobs that have been created?”

Others are suggesting expediting the auctioning of iron ore blocks and relevant operating permits.

Indian iron ore imports hit a record high in January 2018 according to preliminary customs data. Due to the closure of mining operations in Odisha, Indian steel mills imported 1.95 million mt of iron ore in January, up 500 percent from the 0.38 million mt of iron ore imported the prior month and 267 percent more from the same month a year ago.


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