Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

The iron and steel industries in India’s Sundargarh, Odisha have alerted the government to rescue them with remedial policies as they are experiencing a dire shortage of iron ore amidst sky-rocketing prices.


Deviation of iron ores to other states and price alteration by merchant mines has led to a shortage in Odisha’s local market. Sponge iron makers, induction furnace-based steel units and rolling mills have called for state government intervention into the matter. Odisha Sponge Iron Manufacturing Association (OSIMA) has written to the principal secretary of the steel and mines department to ensure that steel and sponge producers in the state have access to iron ore at a reasonable price.


The annual iron ore production capacity of merchant mines in Odisha is about 105mt as against 81.40mt demand of Odisha-based plants. Bulk of the ore mined in Odisha reaches other states for high realizations jeopardizing local industries. 


Also, iron ore production in Odisha fell by 26pc in 2020-21 to 107mt against 145mt in the prior year due to the shut down of various mines in March 2020 due to license expiries. A couple of merchant mines with a joint capacity of 72mt per annum were reauctioned. But only two mines of 11.98mt capacity held by Odisha Mining Corporation (OMC) were able to restart operations.

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