India’s metals and minerals industry on Friday urged for an easing of production of iron-ore in the country to stem soaring prices of the steel-making material as well as of steel.
Prices of iron-ore lumps supplied by state-run NMDC, the country’s largest miner, have increased by 112% in the last six months alone due to a shortage. The price rise in domestic iron-ore also comes on the back of soaring prices of the material in China, the world’s largest consumer.
Transport Minister on Thursday said that he had drawn Prime Minister Narendra Modi’s attention to a 55% hike in steel prices during the past six months, which has affected viability of projects.
Speaking at a webinar by the Federation of Indian Chambers of Commerce and Industry (FICCI) , co-chair of the industry body’s mining committee and metals committee, V.R. Sharma said that the extraction of iron-ore in the mineral-rich state of Odisha had fallen year-on-year by 22%.
“We have to look at what is the cause. Many iron ore mines that were to be reauctioned and mines restarted have not happened,” he said. “Today in the country, there is a huge shortage of iron ore and this has troubled sponge iron ore, steel and other industries.”
Odisha is currently the top producer of iron-ore in the country with production in the southern state of Karnataka and western state of Goa still affected by a long-standing legal disputes.
Rajib Maitra, director at Deloitte Consulting, said that non-operation of auctioned mines in Odisha was one of the main reasons for a shortage of iron-ore.
“We need more production as well as capacity of volume of movement,” he said, urging government officials to fast track work on building freight corridor in the state.
Rahul Sharma, co-chair of FICCI’s mining and metals committee, urged the government to think of providing special treatment and think of mining in terms of it being a core sector.
He suggested that a joint committee should be set up that meets on a fortnightly basis. “This will help expedite the process and probably a lot of value can be unlocked in the shortest period,” he added. India, world’s second-largest steel producer, has set a target of doubling its steel production capacity to 3300 million tons by 2030. The country is blessed with abundant reserves of iron-ore but issues over illegal mining have disrupted production in the last decade.