Government to auction 20 iron-ore mines to revive sector
The government will auction about 20 major iron ore mines this year in its first such sale ever, a top government official said, as it looks to revive its corruption-tainted mining industry.business Updated: Aug 26, 2015 00:47 IST
The government will auction about 20 major iron ore mines this year in its first such sale ever, a top government official said, as it looks to revive its corruption-tainted mining industry.
India’s mining sector has been mired in controversy over illegal allocation of resources. Once the world’s third-biggest iron ore exporter, the country now imports the steelmaking ingredient due to a court-led crackdown on illegal mining.
The government hopes auctions will help curb wrongdoing.
While it is unlikely to lead to an immediate boost in iron ore output at a time when there is a global glut, mine sales will bring India closer to its target of tripling its steel capacity to 300 million tonnes by 2025 and relying less on ore imports.
“Most of the states are in the midst of carrying out their pre-auction activities and hopefully by the end of October and November onwards they will start (auctions),” mines secretary Balvinder Kumar told Reuters.
He expects about 80 mines to be auctioned in the first phase, including limestone, gold and “about 20 iron ore mines”.
India produced 136 million tonnes of iron ore in 2014-15. About 1.5 million tonnes of ore are needed to make 1 tonne of steel, implying the country’s ore output will have to more than triple in 10 years if steel companies are to be self sufficient.
Most of the iron ore mines being sold are in the Karnataka, known for its high-quality ore. This will greatly benefit local steelmakers such as JSW Steel.
Led by JSW’s purchases, India’s ore imports hit a record of over 15 million tonnes last fiscal year as global prices collapsed. Kumar expects prices to improve by the time mines start. “The mining process takes two to three years because they will need all kinds of clearances.”
First Published: Aug 25, 2015 23:14 IST