In his several decades of experience in the steel and mining sector, Mr. G.S. Khuntia has worked in various important positions including Executive Director (Operations), SAIL and Director at NMDC. Currently he is one of the independent directors of OMC and IIMCS and board committee member of the Vizag Steel Plant. A recipient of several national level awards on metallurgy, Mr. Khuntia spoke to Steel 360 on several issues around the mining industry.
Here are the excerpts of the conversation:
Q. Current situation of iron ore is not very pleasant in the country, including Odisha, how long do you think will this crisis continue?
Due to the cases of illegal mining, the iron ore situation is not appealing today. It all started in Goa and then Karnataka and Odisha. Due to the increase in international Iron ore prices (mainly from China), there have been cases of reckless and excess mining by the private miners. But, it is important to note that no public sector miner is involved in illegal mining. However, these violations are minor in most of the cases and can be rectified with the supervision of IBM. Shah Commission has also revealed this. Also, after the order of the honorable Supreme Court on Karnataka mining, decks have been cleared to resume mining operations in the state. We can expect a similar situation in Odisha and I think normalcy should come by the end of 2013 or in the beginning of 2014.
Q. How do you see the central government’s step to curb iron ore exports from the country by increasing export duty to 30%?
After raising export duty to 30% on iron ore, export has come down significantly. (India’s iron ore export has come down to 18 million tons last financial year which was 110 million tons few years back.) Due to this, India is losing big amount of revenue and the profit margin of miners have come down drastically. This will impact large scale layouts in the mining industry, which is one of the biggest employment providers in mineral rich states like Odisha, Karnataka, Jharkhand and Goa. However, I see, the export duty will come down to 10% in the near future.
Q. As an independent director on the OMC board, what are your suggestions for the growth of the company?
I have suggested boosting up iron ore production as there is high demand for the commodity in the market that will go up further. I have also suggested that OMC should sign long term supply arrangements with users. It should also induct qualified young engineers and train them further for the future.