Author: Paul Ploumis15 Jan 2015 Last updated at 06:47:59 GMT  

 

NEW DELHI (Scrap Monster): The steel makers in the country are facing acute scarcity, as the output of iron ore in the country had been low due to the closure number of mines in the country. Earlier, the ban on mines in states like Goa and Karnataka had affected as well as reduced the production of iron ore in the country to 140 million tonnes in the period of 2013-201, from 201 million tonnes in the period 2010-2-11. The output in the country was noted to be 152 million tonnes in the period 2013-2014. After that, the ban on the mines had been partially lifted by the state government and few mines based in Karnataka restarted their production.

 

Many mines, which are located in Goa, as well as in Karnataka still remains to be unopened. In addition, recently there were more mine closures in Odisha, which contributes to about 60 percent in the country’s iron ore production, and also in Jharkhand, which is considered as the third biggest iron ore producing part of the country. Therefore, it is expected that, the iron ore output for the year 2014-2015, will be considerably low.

 

According to the report by the National Steel Policy, the requirements for iron ore has nearly become almost double to 392 million tonnes over the last decade. Hence the Steel Policy drafts therefore advices, distribution of prospected mine to the steel producers, via an open bidding, and also putting more number mines to general bidding.

 

Due to the constraints present in the supply of the commodity, the price of iron ore in the domestic market remained to be firm, even when the global price of the commodity declined to almost half by the end of the year 2014.

 

In the year of 2014, NMDC, had increased the price of the company’s lower cost iron ore by about 10 percent. But due to the large decline in the price of the commodity, steel manufacturers n the country finds that the price of domestic raw material, which used to be 30 to 40 percent lower than the global; price of the commodity in the previous year, are now very much close to the import price.