SC orders closure of nearly half of Odisha iron ore mines

The Supreme Court today ordered temporary closure of nearly half of the iron ore mines in Odisha, the country's top mining state, due to non-renewal of years-old leases, dealing a fresh blow to the steel industry already hit by the closure of several mines in Karnataka and Goa.

Odisha produced more than 70 million tonnes of iron ore in the last fiscal year from 56 operating mines, of which nearly 50 per cent is allowed to be exported.

The 26 suspended mines produced about 40 million tonnes of iron ore, said Odisha's mines director Deepak Kumar Mohanty.

While the production ban may not impact import prices for local steel mills, it could force Indian steelmakers to source raw material overseas and push up demand for iron ore overseas. 

"We will abide by the court's decision and work on renewing the licences for the affected mines within the stipulated six months," reports quoted Mohanty as saying.

The closure of these mines, however, could force steelmakers like Tata Steel Ltd and Jindal Steel and Power Ltd sourcing iron ore from some of the companies to cut down production.

State-owned Odisha Mining Corp controls most of the mining operations in Odisha.

The mining ban and any consequent reduction in local steel production, however, could potentially benefit steelmakers in countries such as South Korea and China as local supply strains force imports.

The mining curbs have already reduced India's iron ore exports by 85 per cent, or 100 million tonnes, over the past two years and is likely to affect the country's steel exports a well with the current ban.