Scarce supply and rising prices of iron ore in India are largely because of the non-operationalization of 13 mines in the eastern state of Odisha, India’s steel minister Dharmendra Pradhan told parliament in a statement on Friday, February 5.
The minister said that the various factors contributing to the increase in prices included, inter alia, reduced availability following iron ore production of only 112 million mt in the April-November 2020 period, compared to 152 million mt during the corresponding period of the previous year.
This was mainly because 13 iron ore mines in Odisha where new mining leases were granted through auction have not been operationalized, the minister said.
However, according to a steel sector analyst, the shortage of iron ore from non-operationalization of the largely merchant mines in Odisha could not be the cause of the surge in iron ore prices, because all large integrated steel mills in the country, government or private, except state-run Rashtriya Ispat Nigam Limited (RINL), have their own captive iron ore mines and are not dependent on market-related pricing of raw material, except for minor volumes in the case of some of the mills.