India’s iron-ore production poised for five-year high

KOLKATA (miningweekly.com) – With the current financial year drawing to a close in little over a month, India's iron-ore production is poised to hit a five-year high.

While official aggregate production data is not yet available, granular province-wide iron-ore production data indicate that India's iron-ore production for 2016/17 is likely to touch 180-million tonnes, the highest since 2010/11, when the country produced 207-million tonnes of iron-ore.

Industry optimism over a rebound in iron-ore mining has been reinforced by the fact that, for the first time in the last five years, growth in production was sustained over two consecutive years.

The higher production expected in the current fiscal year comes on the back of the 155-million tonnes of iron-ore produced in 2015/16.

A Federation of Indian Mineral Industries official has said the sustained growth in production over two consecutive years indicates that mining is getting fundamentally stronger, driven by steady gains in international prices and an improved local business environment.

It was also noted that, over the last few years, production growth in one year has been followed by a slump the next year and recent data indicates a reversal of such a trend.

The rebound of iron-ore production at the aggregate level is the result of a strong showing by two of the largest producing provinces, Odisha in the east and Goa in the west.

A report from the Odisha government showed that iron-ore production in the province had already reached the 80-million-tonne mark between April 2016 and January this year. Production is likely to reach the 100-million-tonne level by close of the financial year on March 31, a rise of an estimated 50% over the previous year.

According to an Odisha government official, the higher production in the province is largely owing to a number of mines being brought back into production during the year.

The government had mounted an aggressive initiative to ensure that iron-ore mining leases that had expired were renewed and, in a number of cases, new 50-year leases were granted under new legislative provisions.

In the western province of Goa, the annual production ceiling of 20-million tonnes, imposed by the Supreme Court, is closing in with the Goa government apprehensive that some mines might have to curtail or close down production unless the ceiling is relaxed soon.

Meanwhile, with the current financial year drawing to a close, the Goa government is attempting a balancing act within the overall production ceiling, a government official said.

The government has allocated an additional production quota to 30 mining leaseholders by reapportioning unused production quotas that other leaseholder have failed to fulfil.

This was done so that the apex court-set aggregate production quota could be achieved and the quota was not left underutilized, thereby making a stronger case for the government when it seeks the court’s approval for a higher production ceiling for the coming fiscal, the official added.