Iron ore production in Odisha has reached a record high in this financial year, with the combined output by both merchant and captive miners touching 94.19 million tonne (as on March 10, 2017). The ore production is at a decadal high, bettering the state's own production rate of 80.8 million tonne (mt) in 2015-16. With-pan India iron ore output by the end of this year, it pegged at 180 mt, Odisha is poised to retain its slot as the highest producer, accounting for over 50 per cent of the output.
The dispatch of iron ore permitted by the state government is 111.1 mt and if achieved, this could be the best ever despatch rate ever. By the end of February this year, the iron ore despatches were already in upwards of 90 mt.
"The extension of lease validity and increased level of mechanisation at some key operating mines had led to the spike in production. We are confident that Odisha's iron ore production will be over 100 mt by the end of this financial year", said a state government official.
Odisha is the largest iron ore producing state and its ore production went up nearly 50 per cent in 2015-16 from 47 mt to 80.86 mt. This came on the back of the state government's swift orders to extend the validity of mining leases after the enactment of the amended Mines and Minerals- Development & Regulation (MMDR) Act.
Pan-India iron ore production moved up 20 per cent last year, rising from 129 mt to 155 mt. Market estimates have put this fiscal's iron ore production in the country to be in excess of 180 mt.
Taking advantage of the rebound in global iron ore prices, Odisha was also keen to export its surplus iron ore. Benchmark prices of 62 per cent Fe grade iron ore fines have touched a multi-year high of $95 per tonne, the highest level since April 2014 buoyed by the strength in Chinese steel prices.
Despite the startling recovery in international global iron ore prices, miners from Odisha have not been able to cash in on the advantage. Iron ore exports till the first week of February from Odisha, have totalled to a measly four mt despite the state's potential to export a lot more.
The existing 30 per cent duty on high-grade iron ore is a deterrent to exports from Odisha and is denying the state's exporters a competitive edge in international seaborne trade. In the Budget for 2016-17, the state government lifted the duty for lower grade iron ore (with iron content less than 58 per cent) which gave a fillip to exports from states like Goa that churn out low-grade ore. Odisha produces mostly higher grade iron ore and has written to the Government of India, asking for removal of the 30 per cent export tax.