Iron ore mine auctions driving India towards captive regime

Currently, about 70% of the iron ore production in India is by merchant miners. However, with auctioning of expiring mine leases and the government’s decision to reserve some of the mines for specified end use, iron ore production will be gradually moving in the hands of captive miners, providing raw material security to steel mills. With about 25% of the iron ore production facing lease expiry by March 2020, any delay in the commencement of production of the mines to be auctioned could cause supply disruption. In this report, we look at the auction performance so far and try to gauge the impact of upcoming auctions on the supply.