India: Odisha government may change stacking norms to improve iron ore supplies

Larger and fewer stacks could improve iron ore supply in Odisha.

The size of stacks to be maintained for inspection of grades could be increased fivefold, from 4,000 tonnes to 20,000 tonnes, considerably easing bottlenecks in Odisha’s iron ore mines, according to industry insiders. This could improve supplies by as much as 30 per cent said one mine owner to SteelMint.

Mines in Odisha must offer 4,000 tonnes of rectangular stacks for sampling before ore is despatched. This needs space within the leasehold, costs INR 45 per tonne of ore and requires a field inspection by the department official before ore can be moved out. This can be waived if the lessee offers to pay royalty on the highest grade instead. The state government thus stands to gain more from mines seeking an exemption.

This was the practice when margins were high and the miner did not have to pay the state a premium as new lessees such as JSW Steel and ArcelorMittal must do. Maintaining neat, railway rake size stacks has however not been as easy resulting in several lessees being pulled up for violations. Some of them have been forced to seek an exemption again and in some cases, like Sarda Mines, pass on the INR 200 additional cost to their buyers.

Acknowledging the fact that the practice itself needed a review, the mining department recently tried out larger stacks. JSW and ArcelorMittal, “two lessees that have space”, were asked to make stacks of 4000, 8000, 12000, 16000, 20000, and 32000 tonnes and as high as 60,000 tonnes which JSW created at Jajang.

A state appointed committee inspected these last Friday and is expected to submit its recommendations next week including, as SteelMint had earlier reported, its views on using drone imagery and live CCTV for supervision of dispatch. At least two miners told SteelMint they are hopeful of the government agreeing to increase the stacksize from 4,000 to 20,000 tonnes.