First, it was the Indian Steel Association (ISA), representing the interest of all major producers of the alloy, that drew the government’s attention to the “testing times” steel-makers—particularly those without ownership of mines—were facing because of the double whammy of a spurt in iron-ore exports and a fall in production, principally in the country’s largest and finest quality ore producing state, Odisha. (Incidentally, Tata Steel left ISA in May, allegedly over differences on contentious mining policy.) Soon, it became a chorus of protests against iron-ore exports with associations of sponge iron and steel-forgings manufacturers making common cause with ISA.
Facing rising displeasure of ministries concerned with infrastructure projects implementation, as also auto and construction groups, as steel prices have climbed to multi-year highs and there have been rapid-fire price revisions by steel-makers in the post-lockdown months, ISA has demanded a six-month ban on iron-ore exports, restriction of e-auction sale to steel- and pellet-makers. It has also urged state-owned mining companies to step up production. Pressure is building on the Naveen Patnaik administration in Odisha over the surrender of three recently-auctioned mines and over others where the owners didn’t take the initiative to execute lease-deeds; the demand is to assign the deposits to state-owned Odisha Mining Corporation and Odisha Mining Exploration Corporation.
At the auctions, some steel companies and merchant-miners had quoted fancy premiums for mines whose leases expired in March. Later, they realised that mining operations would not be sustainable if such high premiums are to be paid on the sale of extracted ore. Didn’t Tata Steel global CEO and managing director TV Narendran say “we certainly will never be bidders at these prices. We thought some bids were unreasonably high”? To continue to remain self-reliant in iron ore as it expands capacity through organic and inorganic routes, Tata Steel will certainly remain on the hunt for acquiring new deposits. But as Narendran says, his group’s mine acquisition decisions at all times will be dictated by “prudence.”