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India: What is the status of iron ore blocks auctioned since 2015?
- Over 60% of auctioned blocks in Odisha, Karnataka since the MMDR Amendment Act, 2015
- Average auction premium at over 100%
- Production to increase as many auctioned mines may come onstream
Around 100 iron ore mine blocks have been successfully auctioned in India since the historic amendment of the Mines and Minerals Development & Regulation Act (MMDR Act) in 2015, as per SteelMint data.

MMDR Amendment: Key facts

The landmark MMDR Amendment Act, 2015 paved the way for the introduction of the auctions regime in India’s mining and minerals sector by replacing the older first-come-first-serve system in a bid to ensure transparency in allocation of mineral blocs.

The reforms undertaken in 2015 have resulted in successful auctions of 273 mineral blocks in different states of the country since 2016. Importantly, the pace of mineral auctions has quickened since the MMDR Amendment Act of 2021, with around 105 iron ore blocks getting auctioned in FY’23.

This has been possible due to radical reforms in the 2021 Amendment such as the abolition of the ‘end-use’ restriction for auctions and uninterrupted transfer of valid old environmental clearances to the preferred bidder.

It bears recall that the 2015 MMDR amendment had set forth specific clauses as regards renewal of mine leases. While merchant mines had their leases extended till 2020, the captive iron ore mines were given a timeline till 2030 after which those mines must come under the auction hammer.

In order to augment domestic iron ore supplies, Section 8(A) of MMDR Act was further amended allowing any lessee of a captive mine to sell minerals up to 50% of the total mineral produced in a year after meeting the requirement of the end-use plant linked with the mine. This, however, would require an additional amount to be paid to the concerned state government.

Similarly, government companies or corporations whose mining leases have been extended after the commencement of the MMDR Amendment Act, 2015, shall also pay such additional amount for the mineral produced after the commencement of MMDR Amendment Act, 2021.

The additional amount for extension of mining leases is 1.5 times the prevailing rate of royalty for iron ore mines.

Auctioned blocks

Notably, out of the 100 iron ore blocks auctioned thus far, 33 are in Odisha and 27 in Karnataka – India’s leading iron ore producing states. Among the other key producers, 12 blocks are in Chhattisgarh, 9 in Maharashtra and 8 in Goa.

Details of auctioned blocks

There are blocks in Madhya Pradesh and Andhra Pradesh, too. However, major iron ore-producing-state Jharkhand has just one block. A lion’s share of that state’s iron ore production is accounted for by captive steel producers.

In an indicator of over-enthusiastic participation in iron ore auctions – mainly by steel players eager to secure long-term supplies in view of surge in capacity – the general average auction premium quoted stands at over 100%, as per SteelMint estimation.

Outlook

India’s iron ore production in FY’23 inched towards 260 million tonnes (mnt). Out of the auctioned blocks, just over 30-odd are in working status which shows that many more mines – especially those auctioned since 2021 – will move towards operationalisation sooner rather than later.

Therefore, SteelMint’s outlook is positive as regards iron ore production even as domestic steelmaking capacity gathers pace.

What are the key government policies that may reshape the Indian minerals industry and how long might high premiums sustain for mineral block auctions? Gain cutting-edge insights from experts on these issues and much more at SteelMint Events’ flagship 6th Indian Iron Ore & Pellet Summit to be held from 24-26 August at JW Marriot, Kolkata.
July 12, 2023
Singapore International Ferrous Week
Date: 22-26 May, Place: Singapore

The Singapore International Ferrous Week (SIFW) will take place from 22 to 26 May 2023 in person at the Sands Expo and Convention Centre, with 4 exciting forums and conferences. Formerly known as the Singapore Iron Ore Week (SIOW), the week-long event has been expanded to cover the entire steel making value chain to give participants deeper insights and more networking opportunities.

More than 1,000 delegates joined us last year for the week-long hybrid event. Themed ‘Resilience in a Low Carbon Future’, SIFW 2023 will gather the global commodities community for a face-to-face event, comprising four forums focusing on the challenges and opportunities facing the iron ore, steel, shipping and coal industries’ pursuit of sustainability.

For the past decade, this annual must-attend event is a platform for the ferrous and shipping industry to connect and exchange insights in a fast-evolving global environment.

Co-organised by Enterprise Singapore, SGX Commodities and Esteel together with partners, SIFW 2023 promises a host of exciting events from 22-26 May 2023.

May 3, 2023
Karnataka iron ore exports to resume after 10 years
Iron ore exports from Karnataka are about to resume after a gap of 10 years, SteelMint heard from market sources. Exports from Karnataka were banned in 2012 by the Supreme Court, which was in effect till May this year, with the aim of preventing environmental degradation and to ensure that the mineral resources of the state were preserved for the domestic industry and for future generations as part of the concept of inter-generational equity.

The Supreme Court on 20 May this year lifted curbs on exports of iron ore from Karnataka and eased all restrictions on sales from the districts of Bellary, Chitradurga and Tumkur where mining activity had been prohibited following rampant environmental transgressions in 2011.

As per a recent update received by SteelMint, a leading miner in the state is planning to export a capesize vessel of iron ore fines for which the material is already in the process of being transported to Krishnapatnam Port. Market chatter is revolving around the near-term prospects for iron ore and pellet exports by Karnataka-based miners.

Factors which may drive exports
- Lifting of export curbs: The apex court lifted curbs on iron ore exports and allowed iron ore operators in the state to sell excavated ore through direct sales as against just through e-auctions. This is a win-win for merchant miners and steel companies. By lifting the ban on exports of iron ore, the court opened an avenue for sale of surplus ore, which the industry had been pleading for. Also, the export duties on pellets and iron ore (except high-grade) have been rolled back recently. It should be noted that there is a possibility of existing low-grade iron ore stocks at mine pitheads in the state to come for exports in the short term. These are estimated at around 6 mnt, as per sources. Additionally, some volumes of seized material around 20-30 mnt are yet to be lifted, which may also come up for exports, as per sources. Besides, some small volumes of fines with sponge iron (CDRI) producers in the state might well get earmarked for exports.
- China demand: After a long lull induced by Covid-related restrictions, the Chinese market is showing some positive sentiments due to the 16-point stimulus package announced by the government for the real estate sector, which accounts for around 35% of China’s steel demand. The possibility of a turnaround in the property sector has been driving iron ore prices higher over the past month, along with loosening of Covid restrictions. A weaker dollar, optimism about China’s economic recovery and positive developments in the real estate sector boosted market sentiment, as iron ore futures on the Dalian Commodity Exchange (DCE) have hit a 6-month high. As global iron ore fines Fe 62% prices have recovered from $80/t in the beginning of November to over $110/t currently, the incentive for exports is always present.
- Production ramp up: The Supreme Court has raised the iron ore production ceiling in Karnataka from 35 mnt to 50 mnt from the A and B category mines. The production cap in Bellary has been raised to 35 mnt from 28 mnt, while in Chitradurga the ceiling has been raised to 15 mnt from the erstwhile 7 mnt. Therefore, the total cap has been increased to 50 mnt. The apex court had lifted the five-year-old ceiling on production from 30 mnt to 35 mnt for A and B category mines in 2018. There was no cap on the C category mines. It has been generally observed that total iron ore demand in the state stands at around 38 mnt annually. Therefore, following the possible production ramp up in the state, there is always the possibility that surplus material would be left for exports.
Karnataka road show

How is Karnataka’s iron ore and pellet industry shaping up post SC verdict? What is the potential in terms of production, demand, exports, and sales? Are you an industry stakeholder keen to find answers to these and several other queries? Book your seat at SteelMint’s Road Show-cum-Conference on Karnataka’s Mining Sector to be held on 19-21 January, 2023.
December 12, 2022
2023 Indonesia Coal Outlook Conference

The government is committed to achieving net zero emission target by 2060 by reducing its dependency on coal and at the same time developing renewable energy generation.

The government has prohibited the construction of new coal power plants and will terminate the operation of coal power plants in stages that will make coal demand in the general electricity sector start to decline to only 150.0 Mt in 2040 and only 19.0 Mt in 2050 before down to zero in 2060.

In 2022, Indonesia is eying to produce 663 million tons with domestic coal use up to 165.7 million tons. Most of coal for the domestic utilization, around 100 million tons, is dedicated for electricity generation.

Many still believe that during energy transition period, coal as reliable and affordable energy source is still required to generate electricity for most emerging countries in Asia, including Indonesia. The government encourages domestic coal utilization for industrial purposes, such as local smelter and cement industries and the development of domestic coal downstream projects such as coal to dimethyl ether (DME) and coal to methanol to support domestic gas and chemical industries.

In the meantime, Indonesia’s coal export to traditional export market of China and India continue to increase this year.

The Central Statistics Agency (BPS) reported Indonesia’s coal export to Europe also jumped by 143.7 percent to US$191.2 million in the second quarter of this year compared to $78.4 million in the first quarter with the largest coal export destinations of Italy, the Netherlands, Poland and Switzerland.

The conference would explore the critical factors on will the coal survive amid global energy transition?

The conference would also highlight the future of traditional markets of China, India, Japan, Taiwan and Korea as well as the European countries as well as the issues that will shape the future of metallurgical and coking coal.

November 29, 2022
2023 Indonesia Nickel Outlook Conference

The government has been trying to woo both foreign and domestic investors to actively participate in nickel downstream projects to produce battery raw materials amid the expected EV boom.

While providing fiscal incentives and facilitates permitting process, the government has also promoted the implementation of environmental, social and governance (ESG) principles from upstream to downstream levels.

Indonesia is known to hold the world’s largest nickel reserves, accounting for 23.7 percent of total global reserves. The country is also the world’s largest nickel producer with Sulawesi and Halmahera being the major producing regions, followed by neighboring country the Philippines. The global nickel demand has soared following the rapid development of the global EV industry.

According to data from the Center for Geological Resources of the Ministry of Energy and Mineral Resources (MEMR), in 2019, Indonesian nickel resources were estimated at 11.78 billion tons and nickel reserves at around 4.59 billion tons.

Most of the operating nickel processing facilities in Indonesia are implementing pyrometallurgy technology, namely Rotary Kiln Electric Furnace (RKEF), which consumes massive energy to process minerals to produce nickel pig iron (NPI), ferronickel (FeNi) and nickel in matte mainly dedicated to the steelmaking industry.

Commodity research company, PT Indeks Komoditas Indonesia (IKI) in its new report said that various government incentives have accelerated the development of nickel smelters in the country, with at least 40 smelters have been built so far this year, and more than 40 new projects are expected in the future.

The report said the government has provided various incentives such as tax allowance, tax holiday, zero import tax, bonded zone facility, and assistance in land acquisition and permitting process, in a bid to accelerate the development of domestic nickel downstream industry to generate greater value from the country’s huge nickel reserves.

From only five smelters operating in 2014, the number has grown to at least 40 smelters, consisting of 36 smelters producing ferronickel or NPI, two smelters producing nickel oxide (MHP), one smelter producing nickel hydroxide, and four smelters producing nickel matte, the report said.

Indonesia Nickel Mining Association (APNI) mentioned that Indonesia, as the world’s largest nickel producer, has been in the global spotlight due to the development of the nickel-based industry. However, the country also faces three long-term major risks, namely nickel resource conservation, waste disposal and carbon emission.

November 29, 2022