By Nageshwar Patnaik in Bhubaneswar, December 15, 2016 : Iron ore stocks are piling up at mine heads across the country as the offtake has come down drastically while the output has been rising.

In Odisha and Jharkhand – the largest producers of iron ore, 85% of the total stock had been build up according to the Indian Bureau of Mines [IBM] data. The total stock of iron ore stood at end-July was 144.5 million tonnes (mt). Around 70 per cent of the stockpile comprises ore with content below 62 per cent, both lumps and fines.

“Iron ore production has shot up at a time when demand for it in the country has sharply gone down due to falling demand of steel. Want is worse still is the fact that the high export duty of 30 per cent on iron content
of above 58% grade ore has dampened export, which was the only outlet. The Union government should lower the duty, preferably lift this duty, as has been done for lower grade ore”, All Odisha Steel Federation [AOSF], president, Pursuhottam Kandoi on Thursday said.

The 30 per cent export duty was lifted in the 2016-17 union Budget for lower grade ore (iron content less than 58 per cent). This has boosted export from Goa where there is hardly any value addition. Odisha and Jharkhand, however, has suffered as both the states have comparatively higher grade ore. Almost all the iron ore mines in the two states are in the hinterland, away from the ports. Non-lifting of ore had resulted in piling up of almost 84 mt at mine heads in Odisha and 38.85 mt in Jharkhand by the end of July.

In 2015-16, the country produced 156 mt of iron ore; net domestic demand was 112.4 mt. Exports were limited to 4.5 mt; leading steel companies, mainly JSW Steel, imported 7.1 mt of ore in 2015-16.
Chief Secretary Aditya Prasad Padhi recently in a letter urged the union mines secretary to lift the 30 per cent export duty, to facilitate clearing of piled up ore at pit heads.

Meanwhile, AOSF has demanded for lifting the embargo on the daytime movement of iron ore. “Movement of mineral freight without any restriction will help ease raw material prices for the end-use industries. The industries are already facing a slew of restrictions. Daytime embargo needs to be lifted in the interest of the end user industries. We only hope the government realises it and acts upon it,” Kandoi said adding that the state government is also losing revenue with the embargo on day-time movement of ore in mineral-rich districts of Keonjhar, Sundargarh and Angul.