To boost supplies of iron ore, govt may transfer idle mines

It may also levy export tax to augment supply of the key input needed to produce steel

- Dipali Banka & Dhirendra Kumar

The government could reallocate non-operational iron ore mines held by Steel Authority of India Ltd (Sail) and Odisha Mining Corporation Ltd (OMC) and even levy export tax to boost supply of the key input needed to produce steel.

The government could reallocate these mines either through fresh auctions, or transfer them to state-run firms to boost output of iron ore, according to a senior government official and industry executives, all of whom spoke on the condition of anonymity.

Several steps to bolster iron ore supply, including auction of around 20 million tonnes (mt) of ore lying at pre-auction mine sites, and expansion of state-run NMDC's mining capacity, were discussed at a high-level inter-ministerial meeting last week.

Union commerce minister Piyush Goyal and Union mines minister G. Kishan Reddy, among others, attended the meeting, according to an industry executive who was part of the deliberations.

NMDC, India's largest iron ore producer, had a mining capacity of 55mt as of 31 March.

India is keen on boosting iron ore supplies, and by extension steel, to expand its infrastructure development and accelerate economic growth.