(BS)
The waiver of 2.5 per cent duty on imports of iron ore lumps, fines and pellets can bring much relief to the domestic steel makers after March 2020, when merchant mines across the country are headed for expiry.
A report by Icra Research says the sluggish pace of auctions of mineral blocks could cast uncertainties on iron ore supplies after the lease validity of the merchant mines ceases. The deficit in iron ore is pegged in the range of 52-55 million tonnes (mt) after supplies from the merchant mines freeze.
The supply stress, Icra feels, would be felt in 2020-21. Tightness in supplies is likely to lead to a sharp escalation in prices of iron ore. Nearly 70 per cent of the country’s steel plants are without captive iron ore resources and hence, dependent on supplies by the merchant miners. The working mines in Odisha and Jharkhand meet around 45 per cent of the raw material needs of steel mills concentrated in the eastern sector. Though these two states have accumulated a stockpile of 127 million tonnes, they are of baser grade and not lifted by steel units.
