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India may face shortage of iron ore

8 June 2019

India Ratings is the Indian division of the international rating company Fitch. It has analyzed the current situation in the country and made their predictions. They relate to a future fiscal year. So, according to experts, the country will face shortage of iron ore. First of all, it is connected with licenses. They relate to mining. At the end of March next year, the licenses of 59 companies over. The combined capacity is about 85 million tons per year. Thus, temporarily suspended production. Of course, there will be new auctions for the sale of licenses. But it will start in the second half of 2019.

As practice shows, the auctions are held 3−6 months. Then the new owner of the license needs to obtain several permits. We are talking about environmental permits and other oversight bodies. In the end, the whole process can last for several years. In India is a leading company engaged in the mining of iron ore. It is called NMDC. It is reported that she will be able to leave all their assets. However, with the expansion of production volume is the complexity. It is allowed to expand to a maximum at 11−12 million tons. And for starters, you need to approve the withdrawal of the injunction. It is known that was imposed a ban on the operation of the plant Donimalai. Its capacity is 7 million tons per year. In addition, companies need to deal with the problem of bandwidth. This refers to a railroad in the States of Karnataka and Odisha.

If you collect all together, you can see the future shortage of iron ore. According to experts, production can decline by 60 million tons. This will lead to acute shortage of raw materials in the country. Problems affect all of the leading metallurgical enterprises. However, this does not relate to SAIL and Tata Steel. They have their own production facilities.

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