India's Steel industry stares at production disruption in 2020: report
MUMBAI (Scrap Register): India's domestic steel production would be significantly affected if there is delay in auction of mines which would complete 50 years of operations by March 2020, according to ratings agency India Ratings and Research (Ind-Ra).
Licences of 288 merchant mines, of which 59 mines are under operations, will expire by March next and if the auction of the mines is delayed it could significantly affect the steel production, the agency said.
Majority of these 59 blocks are iron ore mines situated in Odisha and Karnataka with around 85 million tonnes of approved annual capacity, the report highlighted.
Ind-Ra estimates that around 60 million tonnes of the actual production of iron ore from these mines could be disrupted.
“Considering that the auction process on an average takes three to six months to complete, a delay in initiating them until the latter half of 2019 due to the Lok Sabha elections in the country could affect the timely auction of mining lease,” the report said.
The report assumes significance as India has set an ambitious target of ramping up its steel production capacity to 300 million tonnes by 2030-31.