With rentals on over 30 iron ore mining rentals, which account for 50-55% of Odisha’s and 10% of other states’ production, expiring in March 2020, domestic metal makers will face a disruption in their manufacturing, credit scores organization Crisil said in a research record.

The file stated that with the expiry of iron ore mining leases nearing, there may be some uncertainty about the of completion and scheduling of auctions for G2 exploration licences.

Three viable situations may want to emerge, it stated. In the bottom case, assuming public sale takes location within the 0.33 sector of 2019-20, costs are anticipated to move up 15-20% in 2021 with constrained deliver disruption. If rentals are prolonged via two-3 years for existing mines, there will be no supply disruption.

“However, if there’s a postpone in auctions, which are open to both captive and merchant miners, huge steel gamers shall bid better charges to make certain lengthy-term deliver leading to higher iron ore expenses for them. The entire supply of 60 million tonne will come to a halt until new clerances are received leading to iron ore imports at better expenses,” the document said.

In financial 2019, India is predicted to have produced 207 million tonne of iron ore, sixty five-70% of which changed into by way of merchant miners and the relaxation with the aid of captive steelmakers. Odisha alone is estimated to have produced 114 million tonne, or more than half of India’s iron ore manufacturing. Of this, 70% was produced by using service provider miners and the rest by using captive steelmakers.