Demand buoyant, iron ore units to ramp up capacity
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