By Our Correspondent
BHUBANESWAR/JODA/KOIRA/PARADIP: Merchant miners working in Odisha’s Joda-Koira-Sukinda circles of Odisha’s mineral bearing Keonjhar-Sundargarh and Jajpur district fear loss over Iron Ore Exports in view of COVID-19 lockdown, which extended till May 3.
With COVID-19 lockdown extended till May 3 and many PSU Ports and Private Ports are facing crisis and lack of ample workforces , merchant mine owners spending sleepless nights in Odisha. “ Iron ore exports are bound to slow down in this fiscal as we don’t see any rapid revival in sight,” sources in Joda-Koira circles said.The last fiscal witnessed iron ore exports record a phenomenal rise of 136 per cent to 30.2 million tonnes (January end).
India could export more due to increased domestic supply and competitive prices. India’s production of iron ore was higher in FY20 as miners ramped up outputs to optimal levels during the last year of operations of their mines which have now been auctioned”, an iron ore update report by CARE Ratings noted.
Usually, India exports baser grade iron ore with iron content less than 58 per cent as this category is exempted from duty. An export duty of 30 per cent is imposed on ore with richer content. Exports of iron ore from the country have been falling steeply over the past two years after the government levied the steep export tax.
“Though China has been the largest buyer of India iron ore (with a share of 70-75 per cent) exports to China had declined by 35 per cent each in FY18 and FY19. However, in the financial year 2019-20, exports to China shot up 170 per cent to 25.7 million tonnes during April-January FY20 against the corresponding period last year”, the report by CARE Ratings noted.
In calendar year 2019, India filled in the supply gap created by two of the largest iron ore producing countries in the world, Brazil and Australia. In January 2019, world’s largest iron ore producer Vale SA was forced to suspend operations at several of its iron ore mines following a dam burst, which claimed the lives of more than 270 people.
This led to a severe supply shortage of iron ore globally. Several mines with mining capacity of almost 40 million tonnes were shut. Vale’s production of iron ore fines stood at 302 million tonnes in 2019, 21.5 per cent lower than in 2018, while pellets production was 41.8 million tonnes in 2019, 24.4 per cent lower than in 2018. The supply crisis was aggravated by the tropical cyclone in Australia, which disrupted mining operations and iron ore supplies.
Meanwhile, the operations in as many as 21 Iron,Ore, Manganese and Chromites block under Joda, Koira and Rairangpur circles of Odisha’s mineral bearing Keonjhar, Sundargarh and Mayurbhanj districts, those are expiring by March 31, and auction for which, had already completed, may face trouble in continuing operations in view of the outbreak of COVID-19.
Together, the 21 mines have approvals to raise around 70 million tonnes per annum. Most of the small to mid scale steel plants, sponge iron units and pellet makers are dependent on the merchant ore market to feed their units.
With nationwide lockdown put in place and the consequential delay in paperwork needed to resume these mines is bound to delay the recommencement of the mines.“All successful bidders need a vesting order from the department before they could extract ore from the blocks”, sources said.
Odisha had attracted frenzied bids to 21 merchant blocks offered for online auctions. Average premium was in excess of 100 per cent. JSW Steel proved to be the major disruptor, securing four iron ore mines. ArcelorMittal won the Thakurani mine, quoting a premium of 107 per cent. Among other key steel makers, Jindal Steel & Power Ltd (JSPL) bagged the Guali mine after committing a premium of 144 per cent.
A letter from the Union steel secretary to state governments to ease lockdown orders on operative mines, steel industries, process plants as well as entry and exit of workers and movement of raw materials and finished products to and from the plant premises has not fully calmed frayed nerves.
