‘The order will increase availability of iron ore’
The mining industry has welcomed the Supreme Court’s order allowing more than 100 iron ore mines, which had been shut since 2011, to commence operations. The order gives “in-principle clearance” to 45 ‘A’ çategory and 70 ‘B’ category mines to resume operations, provided they comply with the stipulations set by the court, said R.K. Bansal, Secretary-General, Federation of Indian Mineral Industries (FIMI).
Referring to the Supreme Court’s ruling that the 49 ‘C’ category mines, the ones which had committed the most egregious violations, be closed down, Mr. Bansal said, “This is a little too harsh to kill these mines.”
Asked how soon the ore from these mines could reach user industries, Mr. Bansal said, “It is not as if these mines can start operations tomorrow, it will take time.” However, he said “a few” mines may start operations in about three months.
Vinod Nowal, CEO, JSW Steel, which operates one of the largest single-location integrated steel plants in the country, said the order was “excellent news” for the industry. “We have suffered for the last two-and-a-half years and the order will increase availability of ore,” he said.
However, Mr. Nowal and Mr. Bansal disagreed about the order’s impact on prices. While Mr. Bansal said the increase in availability of ore is unlikely to drive iron ore prices down, Mr. Nowal said prices are likely to moderate. Mr. Nowal expects production to increase from the current level of 14 million tonnes per annum to 20-21 million tonnes per annum. However, Mr. Bansal disagrees with Mr. Nowal’s assessment. “The extent of capacity has no relation to prices because the reference price for ore is set by the monitoring committee based on prices set by the NMDC,” he argued. “There is no question of prices moderating because the shortage will continue even after supplies from more mines come on stream,’ he said.
Mr. Nowal said auction of leases held by the 49 mining companies, which were cancelled by the court on Thursday, would increase availability of ore. However, disagreeing with this, Mr. Bansal said, “This is not possible because the law does provide for the auction of iron ore mining leases.”
Rahul N. Baldota, Executive Director, MSPL Ltd., a company that had stopped mining operations since 2009, said he was “delighted” with the order.
Production expected to increase from 14 million tonnes to 20-21 million tonnes per annum The apex court’s order to close down 49 C category mines termed ‘too harsh’
Production expected to increase from 14 million tonnes to 20-21 million tonnes per annum
The apex court’s order to close down 49 C category mines termed ‘too harsh’