India: Major expansion plans in pipeline to boost iron ore capacity

India's iron ore capacity is set to receive a major boost with a host of mine capacity expansion applications currently being vetted for grant of EC by the Ministry of Environment, Forest and Climate Change (MoEFCC), SteelMint learnt from government sources. The ministry's Expert Appraisal Committee (EAC) for the non-coal mining sector had scheduled a meeting with stakeholders recently and proposals for grant of EC for iron ore mine expansions were taken up for consideration.

Steel majors to augment iron ore production

Steel heavyweights such as JSW Steel, Tata Steel Ltd and SAIL are striving to ramp up iron ore production to ensure continuous captive supply and to sustain steel capacity expansion plans. The EAC took up JSW Steel's application for expanding the capacity of the Nuagaon mine in Odisha from 5.62 mn t per annum to 7.99 mn t. JSW Steel got the mine at the Odisha auctions last year for a premium of 95.2%. The Nuagoan mine is for merchant use with the KJS Ahluwalia Group being the previous lessee. JSW has plans to ultimately raise production to 20 mn t/year from the mine.

Notably, Bhushan Power and Steel Limited (BPSL) has applied for EC for the greenfield Netrabandha Pahar iron ore block with a peak production capacity of 2 mn t per annum. The total mining lease is for 139.223 ha located in Odisha's Sundargarh district. JSW Steel has acquired BPSL under India's insolvency and bankruptcy law recently. BPSL's steel plant in Odisha's Sambalpur district has an installed capacity of 3 mn t per annum.

On the other hand, Tata Steel Ltd has sought approval for expanding run of mine (ROM) iron ore production capacity from its captive Noamundi mine in Jharkhand from 10 mn t to 19 mn t/year. Located in the mineral-rich West Singhbhum district, the total lease area of the mine is 1160.06 ha.

The EAC has also considered the proposal for terms of reference (ToR) of state-owned Steel Authority of India Ltd (SAIL) for expansion of the Barsua-Taldih-Kalta mines from 8.05 mn t to 16 mn t per year of ROM iron ore production. Located in Odisha's Sundargarh district, the amalgamated lease area of the three mines is 2564.323 ha. The existing EC limits of Kalta, Taldih and Barsua are 2.50 mn t, 2.05 mn t and 3.50 mn t respectively; therefore, the total capacity is sought to be expanded from a little over 8 mn t to 16 mn t per year.

Merchant miners plan to raise output

Merchant iron ore producers, too, have drawn up capacity expansion plans on a similar scale. State PSU miner Odisha Mining Corporation (OMC) has sought approval for expanding the capacity of the Jilling Langalota mine in Odisha's Keonjhar district from 6.28 mn t to 10 mn t per annum. As reported by SteelMint earlier, the leading merchant miner has plans to increase the capacity of the Guali iron ore mine to a mammoth 30 mn t/year from 5.7 mn t at present. Both the mines were allocated to OMC after months of non-operationalisation following the Odisha minerals auctions in 2020.

The other major Odisha-based merchant iron ore producer Rungta Sons Pvt Ltd has sought approval for expanding ROM iron ore production from the Sanindpur iron and bauxite mine in Odisha's Koira circle from 7 mn t to 15 mn t per annum. The grant of EC also takes into consideration the increase in capacity of handling low-grade ore from the old stacks/dumps at the mine from 1.06 mn t to 1.5 mn t/year. Therefore, taking low-grade ore production into the reckoning, the total capacity of the mine is set to increase to 16 mn t from 8.06 mn t per annum at present.

With the above-mentioned expansion proposals being lined up for approval, SteelMint estimates that the total EC capacity of these mines is set to increase to 99.9 mn t per annum from the existing 42.6 mn t. The country's iron ore production has to increase in the coming days in order to sustain burgeoning steel production. India's iron ore production fell to around 205 mn t in FY21 from over 245 mn t in the preceding fiscal.

EC limit & proposed EC limits in mn t pa
Source: SteelMint Research