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Tue, 21st Feb 2017 (Source:Business Standard)
Iron ore production in Odisha has touched a peak of 85 million tonne (mt) (till February 7), the state's highest in a decade and it has improved its own production rate of 80 mt in previous financial year. Going by the current production tempo, the state's iron ore output can breach 100 mt, setting a new benchmark.
Despatch of iron ore from the mines has also increased considerably by reaching to 89 mt. It points out the reviving demand from steel and other end-use industries.
"The extension of lease validity and increased level of mechanisation at some key operating mines had led to the spike in production. We are confident that Odisha's iron ore production will be over 100 mt by the end of this financial year", said a state government official.
Odisha is the largest iron ore producing state and its ore production went up nearly 50 per cent in 2015-16 from 47 mt to 80.86 mt. This came on the back of the state government's swift orders to extend the validity of mining leases after the enactment of the amended Mines and Minerals- Development & Regulation (MMDR) Act.
Pan-India iron ore production moved up 20 per cent in the previous year, it rises from 129 mt to 155 mt. Market estimates have put this fiscal's iron ore production in the country to be in excess of 180 mt.
Taking advantage of the rebound in global iron ore prices, Odisha was also keen to export its surplus iron ore. Benchmark prices of 62 per cent Fe grade iron ore fines have touched a multi-year high of $92.34 per tonne, the highest level since April 2014 buoyed by the strength in Chinese steel prices.
Despite the startling recovery in international global iron ore prices, miners from Odisha have not been able to cash in on the advantage. Iron ore exports till the first week of February from Odisha, have totalled to a measly four mt despite the state's potential to export a lot more.
The existing 30 per cent duty on high-grade iron ore is a deterrent to exports from Odisha and is denying the state's exporters a competitive edge in international seaborne trade. In the Budget for 2016-17, the state government lifted the duty for lower grade iron ore (with iron content less than 58 per cent) which gave a fillip to exports from states like Goa that churn out low-grade ore. Odisha produces mostly higher grade iron ore and has written to the Government of India, asking for removal of the 30 per cent export tax.