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Industry divided over Odisha's decision to auction chrome mines

Aug 12,2019

Odisha government decides to auction two chrome ore mines lapsing on 31 March 2020. Ferrochrome is a key ingredient in the production of stainless steel. Neither the players, dependent on these mines nor Tata Steel which both sold and consumed chrome from the mine is happy with the state government’s decision.

 

Bids have been invited for Misrilall Mines’ Saruabil mine and BC Mohanty’s Kamarda mine, two of the three deposits lapsing in seventh months. On the other hand, Tata Steel’s Sukinda mine is being recommended for reservation for state-owned Industrial Development Corporation of Odisha Limited (IDCOL). This may not be the government’s final decision.

 

These leases are among the hundreds of merchant mines lapsing on 31 March 2020 under the 2015 amendment mandating auction of mineral resources. The auction of these chrome mines, preceding those of nearly 30 iron ore mines in the pipeline, marks the difficult transition mineral-based industries, and Odisha, will have to make to avoid a disruption in the supply of ore next year.

 

India has 3-4 percent of the world’s chrome ore reserves, 97 percent of this lies in Odisha’s Sukinda valley. Along with the state-owned Orissa Mining Corporation (OMC), the three mines catered to 0.7 million tonne capacity of ferrochrome, or almost half the country’s 1.4 million tonnes annual capacity. Balasore Alloys, Indian Metals, and Ferro Alloys and Ferro Alloys Corporation Limited have captive mines with rights till 2030.

 

"There are too few mines to allow equitable distribution, auctioning them would lead to hoarding of chrome ore by a few," argues the All Odisha Steel Federation representing companies such as Visa Steel.