KOLKATA (miningweekly.com) – Undeterred by investors’ poor response, a production glut and the large number of mines that remain closed, India’s Mines Ministry was hopeful that provinces would be able to auction another 20 iron-ore mines before the end of the current financial year in March 2017.
According to a Mines Ministry official, the 20 iron-ore mines would also include those that went unsold in the various provinces’ previous auction rounds.
The 20 mines included 14 blocks in Karnataka, three in Odisha and one each in Rajasthan, Maharashtra and Telengana.
The official said that a meeting chaired by Steel and Mines Minister Narendra Singh Tomar in early June, reviewed the recent legislative changes empowering the provinces to auction all noncoal mineral blocks.
The meeting underlined that the federal government extended support in terms of facilitating issues, such as land acquisitions, securing mandatory approvals and building investors’ confidence to enable the provinces to complete the auction of at least 20 of the identified iron-ore blocks within the current financial year.
However, it was pointed out during the review meeting that, of the 17 iron-ore blocks put up for auction, only one in Odisha was successfully sold to the Essar Group, while others were left unsold, indicating a lack of confidence among investors to commit fresh funds at a time when the steel industry was in financial distress and the iron-ore industry remained in oversupply.
According to government data, iron-ore production during 2015/16 was pegged at 155-million tons, catching up with the previous record of 169-million tons achieved in 2011/12. In the current year, production was forecast to hit the 180-million- to 200-million-ton mark, despite 267 of the total 518 iron-ore mines in the country remaining closed.
With carryover stocks estimated at 150-million tons on May 31, there was a glut of iron-ore in the domestic market and domestic steel producers, already suffering for huge debt burden, were under little compulsion to make additional investments in securing captive raw material sources, officials added.