De­mand buoy­ant, iron ore units to ramp up ca­pac­ity

Business Standard - - ECONOMY - JAYAJIT DASH

Rid­ing on a ro­bust de­mand, key mer­chant min­ers in Odisha are scal­ing up iron ore pro­duc­tion.

Be­sides the firm de­mand from end-use in­dus­tries, buoy­ancy in prices is also prompt­ing min­ers to ex­pand out­put.

KJS Ah­luwalia, a ma­jor non- cap­tive miner, has sought green clear­ance to raise ca­pac­ity at its Nua­gaon iron ore mines from 5.62 mil­lion tonnes per an­num (mtpa) to 7.99 mtpa.

The miner is also keen on in­stalling a ben­e­fi­ci­a­tion plant with two mtpa ca­pac­ity along with crusher and screen plants. The fa­cil­i­ties are to come up within the miner’s lease­hold area.

Aditya Birla Group, owned Es­sel Min­ing & In­dus­tries Ltd, too, has pro­posed to en­hance ca­pac­ity of its Koira iron ore mines from four to six mtpa. Pub­lic hear­ing for the pro­posed ex­pan­sion is sched­uled on Oc­to­ber 30.

Be­sides, Thaku­rani iron ore mines, un­der the lease­hold of Kaypee En­ter­prises, has sought to ex­pand iron ore pro­duc­tion ca­pac­ity from 5.5 to 7.99 mtpa.

“De­mand con­tin­ues to be strong in both the do­mes­tic and in­ter­na­tional mar­kets. Min­ers are scal­ing up to meet the en­hanced de­mand as out­look is buoy­ant,” said a min­ing in­dus­try source.

Ac­cord­ing to a re­cent re­port by CARE Rat­ings, iron ore pro­duc­tion in the coun­try is set to strengthen by two to five per cent this fis­cal, propped up by sta­ble de­mand from in­fra­struc­ture and au­to­mo­bile in­dus­tries. Iron ore pro­duc­tion dur­ing the last fis­cal was 210 mil­lion tonnes, a growth of nine per cent year-on-year.

Of late, iron ore prices have been ris­ing in the do­mes­tic mar­ket. NMDC Ltd, the largest pro­ducer, an­nounced its sec­ond price hike for Septem­ber. It raised price of lumps by 8.4 per cent to ~3,850 per tonne and those of fines by 6.43 per cent to ~3,310 a tonne.

The com­pany at­trib­uted the price hike to lesser pro­duc­tion due to rains and also ro­bust de­mand for ore along with firm­ing up of steel and sponge iron prices.

Iron ore fines prices have soared 80 per cent in Odisha be­tween June and Septem­ber de­spite in­ter­na­tional prices stay­ing range bound. Fines prices till the last round of hike soared from ~1,862 to ~3,350. Lumps prices, too, had moved up 29 per cent in the pe­riod un­der re­view, in­creas­ing from ~4,094 per tonne to ~5,300. By con­trast, prices of bench­mark Fe 62 grade fines inched up mod­er­ately from $63.95 to $66.2 per tonne.

Some end user in­dus­tries in Odisha feel mer­chant min­ers were putting pres­sure on iron ore prices by pro­duc­ing be­low the ap­proved en­vi­ron­ment clear­ance lim­its. Odisha is the big­gest iron ore pro­ducer — the state saw 102 mil­lion tonnes out­put in 2017-18. The state has an ap­proved iron ore min­ing ca­pac­ity of 163.8 mtpa. Of this, mer­chant or non-cap­tive lessees have ap­provals to mine 118.35 mt.

Ac­cord­ing to a re­port by CARE Rat­ings, iron ore pro­duc­tion in In­dia is set to strengthen by 2-5 per cent this fis­cal, propped up by sta­ble de­mand from in­fra­struc­ture and au­to­mo­bile in­dus­tries

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