KOLKATA (miningweekly.com) – India is poised to close the current financial year with iron-ore production of about 210-million tons, the highest in the last nine years, but domestic steel mills are still haunted by the spectre of a shortage of the raw material from next year.

According to estimates from industry body, the Federation of Indian Mineral Industries, domestic iron-ore production by March 31, 2019, is expected to be a shade over 210-million tons, the highest since production touched 219-million tons in 2009/10.

The recent production high is proving to be little solace for domestic steel mills as mining leases for numerous iron-ore mines are slated to expire by March 2020, and will be put up for fresh auction by respective state governments.

Steel companies are wary that state governments, which need to start the auction process for allocation to new miners by July, have been tardy in meeting the timelines and this could lead to delays in allocating new mining leases and disruptions to iron-ore supplies as mines could close down until new auctions are completed.

According to government data, as many as 288 mines – iron-ore, manganese, bauxite and limestone – are facing lease expiry by March 2020.

Significantly, even with rising domestic production of iron-ore during the current financial year, imports of the raw material have also been on the uptrend, with ten-million tons shipped in between April and November 2018, compared with eight-million tons during corresponding previous period.

Soon after a meeting of the Parliamentary Consultative Committee on Monday, Steel Minister Chaudhary Birendra Singh said that the Steel Ministry was engaged in finding a way around the risk of several iron-ore mines closing down should new auctions not be completed on time as disruptions in supply of raw material could potentially lead to a fall in domestic steel production.

He said that it was a serious issue that not only iron-ore, but also other steelmaking inputs like limestone and manganese supplies could be disrupted and the Steel Ministry had appointed a senior official exclusively designated to ensure that local steel mills did not face raw material shortages.