Captive iron ore producers in Odisha are awaiting the recommendation of the Justice MB Shah Commission, which is probing irregularities in the ore mining industry in the state.
The commission is finalising its recommendations on irregularities in ore mining in Odisha. Some reports indicate that if the commission suggests a blanket ban on mining, SAIL would lose 4 mn t of captive iron ore output, while Tata Steel would lose 7 mn t of iron ore a year.
Shortage of iron ore may force Tata Steel to operate only at about 60 per cent utilisation, a report by EmKay Global Financial Services shows.
The report points out that Tata Steel needs about 17 mn tpa of iron ore to operate its current steel production capacity of 9.7 million tonne per annum (mn tpa).
Currently, its iron ore requirements are partly met by supplies from Noamundi and Joda (East) mines in Jharkhand and Odisha, respectively.
Also, as iron ore for the company's 6-mn tpa steel plant being set up Odisha is likely to be supplied from the Khandband mine (Odisha), a ban might delay the project.
Operations at SAIL's steel mill in Rourkela would also be hit if captive miners are forced to discontinue mining, reports suggest. Though the company has mines in adjoining Jharkhand, it would have to pay high costs to transport iron ore from there, reports indicate.