India's top iron ore state to meet output target despite mine closures

BHUBANESWAR, India, Jan 2 (Reuters) – India's top iron ore state is likely to produce 100 million tonnes of ore in the 2017/18 fiscal year, in line with its target, despite authorities ordering the closure of some mines, a senior government official told Reuters on Tuesday.

The eastern state of Odisha suspended operations of seven mines after leaseholders failed to meet a deadline on Dec. 31, fixed by India's Supreme Court, for paying penalties for illegally extracting ore between 2000 and 2011.

The Odisha state accounted for more than half of India's total 192 million tonnes of iron ore produced in the fiscal year to March 2017.

Between April and December, the state generated 78 million tonnes of iron ore, including 14.57 million tonnes produced by the seven mines that have now been shut down, Deepak Kumar Mohanty, Odisha's mining director, told Reuters.

"Even if these mines are closed, there is scope to reach to 100 million tonnes because other operational mines can enhance production," Mohanty said.

The mines that were forced to close down include those operated by state-owned Industrial Development Corporation Of Odisha Ltd.

After finding 131 miners guilty of violating environmental and other guidelines, India's Supreme Court last year levied penalties on them.

But the state government of Odisha has so far recovered only 82.49 billion rupees ($1.3 billion) as against 190 billion rupees of combined penalties.

Some miners had petitioned the Supreme Court to extend the deadline, but the court rejected this.

($1 = 63.46 rupees)

(Writing by Neha Dasgupta; editing by Mayank Bhardwaj and David Evans)