To Maximise Profits Government Allows SAIL To Offload Upto 25 Per Cent Iron Ore Production From Captive Mines

In a big reform initiative, the government has allowed state-owned Steel Authority of India Ltd (SAIL) to sell 25 per cent of its iron ore production from captive mines and dispose off other low-grade iron ore dust and fines accumulated over the years in the open market.

At present, production from captive mines is solely meant for consumption of the company that has been allotted a mine. Any surplus is either left unsold or handed to state mineral corporations which then sells the mineral commercially.

The change implies that around 7 million tonnes of iron ore, produced at its different mines in the states of Jharkhand, Odisha and Chattisgarh, can be offloaded by SAIL to the domestic market after getting necessary clearance from the respective state governments.

This will enable SAIL to not only fulfil its own requirement but also to partially cater to the shortfall in domestic iron ore requirement. SAIL produced just over 27 million tonnes of iron ore last year. So, it could undertake the sale of high-grade iron ore as well to other steel making units at a much better valuation.

Sources, however, said that entire 7 million tones of this grade of ore may not be sold this year as SAIL itself has large ore needs to feed its 21 million tonne steel making capacity that is gradually being ramped up to 50 million tones under next phase of expansion.

There is a market for low-grade ores and fines as well. SAIL can sell these to companies that agglomerate ore for use by the steel sector.

SAIL has around two dozen iron ore mines in Chhattisgarh, Jharkhand and Odisha. These would be utilized for commercial sale of ore.

(With inputs from IANS)