By Bizodisha Bureau, Bhubaneswar, July 23, 2019: Pellet manufacturers based in Odisha have sought the state government’s nod to participate in auctions of iron ore blocks.

In a letter to the steel and & mines department, Pellet Manufacturers Association of India (PMAI) has said that iron ore pellet plants in the state do not have captive mines and are largely dependent on merchant miners for raw material supply. “Moreover, 16 merchant mines of around 79 mpta (million tonne per annum) capacity are going to lapse on March 31, 2020 which would add up to the shortage further and more pellet plants may close down” it added.

Citing Karnataka’s example, PMAI pointed out that the pellet manufacturers were permitted to bid for iron ore blocks. Odisha, however, offers iron ore blocks exclusively for integrated steel plants.

PMAI has suggested iron ore blocks with 75 per cent fines in their repository may be kept aside for pellet makers while the lumps from such deposits can be sold in the open mark

Odisha contributes about 29 million tonnes per annum (mtpa), or 34 per cent of the country’s total pellet making capacity. In FY19, the total pellet output in Odisha was 20.76 million tonnes (mt), growing 13 per cent year-on-year. Essar Steel and Jindal Steel & Power Ltd (JSPL) run the biggest pellet complexes in the state.

Pellets are made from enriched iron ore fines which are available in plenty in the state. However, 26 per cent of the country’s pellet making capacity is idling as the fines are unavailable at optimal prices. But iron ore pellets – intermediate products in the process of steel making are losing market share to iron ore lumps, which steel makers prefer to buy because of their price competitiveness.

Odisha has so far put up three of its virgin iron ore blocks for online auctions. All three have been awarded to steel makers- Essar Steel, Bhushan Steel Ltd (now Tata Steel BSL) and Bhushan Steel & Power Ltd as only integrated steel plant was listed as end use for the blocks.