Odisha miners cut iron ore price by 10% on improved supply

Mining companies in Odisha, which account for more than 50 per cent of national production and supply of iron ore to steel plants, have cut their prices by about 10 percent in the new supply contracts drawn up in April.

This is despite the indication by another big supplier governmentowned NMDC to not slash ore prices in April.

While the price of iron ore fine quoted by Odisha suppliers has come down to ~2,000 per tonne from ~2,200 per tonne, the sized ore (lump) price has slumped to ~4,300 per tonne, from ~4,800.

Last month, prices had seen a similar fall of ~200 to ~250 per tonne for fines and ~450 to ~500 for lumps.

Compared to January, when the iron ore rate had peaked on fears of a supply crunch after closure of some large mines in Odisha, the reduction has been to the extent of ~500 per tonne for fines and ~1,000 per tonne for lumps.

The rate for fines had gone up from ~1,400 a tonne to ~2,500 a tonne and lumps had risen from ~3,200 a tonne to ~5,300, between October and January. The fall in iron

ore prices owes to easing of their supply apprehension. Some big mines which were shut after a December 31 deadline for payment of compensation towards excess mining during 2001 to 2011, in violation of green norms and approved mining plans, have resumed operations.

The closure of mines had threatened to knock off 20 million tonnes (mt) of production capacity.

The reopening of other closed mines, shut since 2014 for lack of statutory clearances, has greatly improved the scenario. Around 25 mt of capacity is estimated to have been restored last month and another 8 mt capacity is expected to be in operation this month, with renewal of clearances of five more mines.

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