With seven manganese and four chromite non-captive mines on their way to shut down by March 2020, the mining industry is staring at a sizeable job loss since the ratio of direct and indirect employment is 1:10.
This is just the beginning since mining leases of total 329 mines of private mining companies, including 48 operative and 281 non-operative mines spread across 10 states, is set to expire on 31, March 2020.
Of these, 50 per cent of operative mines are in Odisha and the largest shares of non-operative mines are of Goa with 184 mines and Karnataka with about 42 mines.
Since the ratio of direct and indirect employment is 1:10, an estimated 250,000 direct job losses are expected by March 31, 2020. The cumulative loss is expected to reach 2.5 million and can grow further. Also, once mining stops, the revival of mining activity takes months, said FIMI.
With focus on infrastructure and domestic manufacturing, India has set a steel production target of 300 million tonnes of crude steel by 2030-31. This means the industry needs to increase the present capacity by 2.11 times from 142 million tonnes to 300 million tonnes in the next 11 years.
This translates into annual requirement of 11 million tonnes of manganese ore and 5 million tonnes of chrome ore, according to the National Steel Policy (NSP) 2017.
Despite having a total production capacity of 5.15 million tonnes per annum in the ferro-alloy industry, this industry has been battling a slowdown in the past five years (2013-18), with production of ferro-chrome stagnant at 1 million tonnes, ferro-manganese at 0.52 million tonnes and ferro-silicon at 0.09 million tonnes.
Ferroalloy production is an important part of the manufacturing chain between mining and steel and alloys and not a single steel grade is produced without ferroalloys, said experts.
India has manganese ore to the tune of 496 million tonnes and chrome ore to the tune of 344 million tonnes as on April, 2015, said FIMI. However, the country is currently importing these minerals.
A demand-supply mismatch in the ferro-alloy industry could also affect domestic steel production further. The latter is already reeling under production cuts due to weak demand scenario in the domestic market. Among the top steel producers in the country, Sajjan Jindal-led JSW Steel reported a drop in crude steel production for November by 7 per cent on year-on-year basis to 12.90 million tonnes with long steel production dropping by 14 per cent on year-on-year basis in the period under review.