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Last Updated : Sep 17, 2019 07:19 PM IST | Source: PTI

Govt allows SAIL to sell 25% iron ore output in open market

The mines ministry has noted that there is a need to take adequate steps to ensure availability of iron ore in the market to meet the demand of domestic steel makers.

 
 
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The mines ministry on Tuesday said it has allowed state-owned SAIL to offload up to 25 per cent of total iron ore produced in the previous year through open market. However, it will be subject to clearance from the respective state governments, where the mines are located, after following due procedure. It is valid for a period of 2 years, the ministry said in a statement. The country's largest steel maker, under the Ministry of Steel, has over 20 captive mines spread across Jharkhand, Odisha, Chhattisgarh and West Bengal.

As per the provision of section 8A(6) of the MMDRA Act 1957, the lease of 31 working iron ore mines are expiring next year on March 31, 2020, and it is expected to lead to a shortfall of 60 million tonnes (MT) of iron ore in the market, the ministry said.

The mines ministry has noted that there is a need to take adequate steps to ensure availability of iron ore in the market to meet the demand of domestic steel makers.

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It has been informed by the ministry that SAIL has capacity to enhance its iron ore production from its captive mines by 7-8 MT in 2020-21 and by 10-12 MT in 2021-22.

Steel plants of the firm are designed to process defined quantity and quality of ore and the increased production from captive mines can not be consumed in their plants, it said.

"In order to maintain the availability of iron ore in the market and considering the capability of captive mines of SAIL to increase their production, the Central Government, in exercise of the power conferred under section 20A of MMDR Act 1957 hereby allows SAIL to sell in a year up to a quantity equivalent to maximum 25 per cent of total mineral production in the previous year. The norm of 25 per cent of total production shall be calculated on the cumulative production of all captive mines of SAIL in a state," the ministry in its order said.

In this regard, an authorised person in-charge of captive mines in SAIL will make an application to the concerned state government giving details of production during previous year and quantity and garde of mineral proposed to be sold in the open market.

"The state government in consultation with the Indian Bureau of Mines if satisfied having regard to the quantity and grade of such mineral shall by an order permit the lessee to dispose of the mineral, in such quantity and in such manner, as specified by the state government. The relaxation is allowed for a period of two years," it added.

In a separate order the ministry said that over 162 million tonne (MT) of low grade iron ore fines and ores are also lying at different places across the country and out of this, about 70 MT, including slime, is lying dumped across captive mines of SAIL.

The order further said that the state governments where SAIL has captive mines have been asked to allow the sale of sub grade minerals lying at the mine pit heads of captive mines of SAIL.

The procedure for the sale of low garde ore will be the same as for the iron ore.

"SAIL does not have enough beneficiation and pelletisation capacity. Hence, it is not possible for it to consume these low grade fines/ores for its steel plants...it is imperative that the sub grade ores/fines, which are not suitable for end use of captive purposes are allowed to be sold to the domestic end user companies," the order added.

"Ensuring raw material security for Indian steel industry has been at the top of our agenda. Our government has taken several efforts towards this and the order passed by the Ministry of Mines is an important step in this direction," Steel Minister Dharmendra Pradhan said in the statement.

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First Published on Sep 17, 2019 07:16 pm
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