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Iron ore supply to steel makers to be disrupted after mining leases expire

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With the mining leases of 329 private mines slated to expire on March 31, apex mineral body FIMI believes that iron ore, a raw material used in steel-making, will be the worst hit from the move.

The 329 mines, including 48 operative and 281 non-operative ones, are spread across 10 states, Federation of Indian Mineral Industries (FIMI) said.

"Raw material for steel industry, iron ore, would be the worst hit, since out of 329 mines 232 are of iron ore alone - 24 operative and 208 non-operative iron ore mines," FIMI Secretary General R K Sharma said in a statement.

"Things are not that simple as the government might be thinking. It is going to be a panic situation for a lessee if it is not able to retain the mine.....On one side steel industry is looking to produce 300 plus million tonne and here we have a situation where supplies of raw material are bound to get disrupted for a long period," Sharma said adding that the current capacity is of about 100 million tonne.

When India is looking to achieve this target, the blues in iron ore mining will be a major roadblock for steel producers, he rued.

The mining leases of 48 operative mines - 24 in Odisha, six each in Jharkhand and Karnataka, five in Gujarat, three in Andhra Pradesh, two in Rajasthan, and one mine each in Himachal Pradesh and Madhya Pradesh - will expire on March 31, 2020.

Mining leases of 184 non-operative mines in Goa, 42 in Karnataka, 12 each in Jharkhand and Madhya Pradesh, nine in Maharashtra, seven in Odisha, six each in Andhra Pradesh and Gujarat, two in Rajasthan, one in Himachal Pradesh will also expire.

Majority of non-operative iron ore mines are in Goa which has a blanket ban on mining.

Besides iron ore, the mining leases of 21 mines of manganese, 14 of bauxite, 23 of limestone, four of chromite, two of graphite, one of garnet and 32 of other minerals will expire on March 31.

"FIMI does not understand the logic behind such discrimination. For captive mines the expiry is March 31, 2030 and for non-captive mines it is March 31, 2020. Ultimately the raw material is being used to make final products. These bottlenecks are nothing but hinderance in economic growth and need to be removed," Sharma said.