India’s KIOCL gets Fe, Mn ore mining lease in Karnataka

India's state-controlled iron ore pellet producer KIOCL has received a mining lease grant from the Karnataka government for iron ore and manganese ore mining in the Devadari range located in the state's Ballari district.

The producer has received a mining lease for an area of about 388 hectares for a period of 50 years, KIOCL said. The mine has total mineable reserves of about 7.3mn t with an average Fe content of 58.04pc, according to a pre-feasibility report.

KIOCL runs a 3.5mn t/yr iron ore pellet plant in Mangalore and mostly procures raw material from the country's largest iron ore producer NMDC's Bailadila mines in Chhattisgarh state and also sources from other domestic and overseas supplies. The mining lease grant will help the pellet producer reduce its dependability of sourcing the raw material from other producers.

India's Supreme Court raised the ceiling on annual iron ore production in Karnataka last year to 50mn t/yr from 35mn t earlier, with the district of Ballari receiving production approval for 35mn t/yr from 28mn t/yr earlier.

Environmental concerns resulting from excessive mining prompted the top court to cancel mining leases in the state in 2012 and impose a curb on iron ore exports, which was overturned in May 2022.

The producer plans to develop an opencast mine in the location with a capacity of 2mn t/yr of iron ore and 500 t/yr of manganese ore, as well as a 2mn t/yr beneficiation plant, according to the pre-feasibility report. But further feasibility studies may alter project details.

KIOCL restarted its Mangalore pellet plant on 24 November after over five months, following the withdrawal of export duties on pellets on 19 November. Around 150,000t of KIOCL pellet has been sold to China in the spot market since the duties were removed, according to Argus data.

The Argus 63pc Fe 2pc alumina pellet index average stood at $124.75/t in December 2022, down by 22pc from a year earlier, but up by 14pc on the month.

By Sumita Layek