By Bizodisha Bureau, Bhubaneswar, March 26. 2019: Steel plants without having captive iron mines may face disruption in supplies of iron or if the auction of 33 mines whose leases are slated to expire in March next year are not held in time.

These mines contribute about 28 percent of the country’s total production of iron ore, a key raw material used in steelmaking, according to a report by the Ministry of Mines. The majority of these are located in Odisha (16 licences set to expire), followed by Karnataka (eight) and Jharkhand (five).

Among the 16 working licences of India’s largest iron-ore producing state of Odisha, Serajuddin and Rungta mines produced 6 million tonnes and 11 million tonnes, respectively, last year. Overall, these two miners have 2.9 percent and 11.65 percent share, respectively, of India’s total iron ore market, it said.

Odisha was set to auction the 16 mines by March this year but deferred the timeline as the state awaits clarity on the maximum area a lessee can hold. But now the new lessee has to apply afresh for environment and forest clearance after the re-allocation of an expired mine. This process could take two to three years before the mine can be made operational.

The Union government advised the states to start auctions by July 1 this year so that the incoming miner has enough time to make the mine functional, according to the Ministry of Mines report.

However, the state-run NMDC Ltd., India’s largest producer of iron ore will benefit due to likely disruption n iron ore supply to steel plants, since its lease will continue to be operational.

NMDC currently produces 22 million tonnes of the raw material against its capacity of 29 million tonnes.

Non-integrated steelmakers like Jindal Steel & Power Ltd. and JSW Steel will be impacted by the iron ore shortage if they fail to receive any mine in the auction, according to Edelweiss Research.