Stand-alone iron ore pellet manufacturing plants in the eastern Indian state of Odisha have applied to the government seeking reservation of iron ore blocks to be auctioned over the next few months, an official at the Pellet Manufacturers’ Association of India (PMAI) said on Tuesday, July 30.
The PMAI official said that a total of 29 million mt of iron ore pellet manufacturing capacity located in Odisha does not have any captive source of raw material and source their entire requirement of iron ore fines from mines located in the state.
These Odisha-based iron ore pellet manufacturing firms have written to the Odisha government that at least a few iron ore blocks where mining leases are expiring by March 2020 and will be put up for auction of fresh mining leases over the next few months should be reserved for bidding exclusively by pellet manufacturers.
It has been pointed out by these companies that the Mineral Auction Rules 2015 state that the government is empowered to reserve raw material blocks for exclusive bidding by end-use companies.
The companies in their communication have also pointed out that the southern Indian state of Karnataka reserved iron ore blocks to be auctioned exclusively for pellet manufacturing. However, in Odisha the state government has allocated iron ore blocks through auctions to specific end-users which only included integrated steel mills.
Under such circumstances, the only option for pellet manufacturers is to participate in bidding at open auctions held for all interested parties, which is not economically viable for pellet manufacturing companies, the official added.