Low Mine Usage in Odisha Stirs Concern as India Targets Higher Iron Ore Demand

Miners in Odisha are leaving nearly forty percent of their mining capacities unused, sparking worries about wasted resources and lost money. This issue draws attention because India expects iron ore demand to reach 772 million tonnes by 2047.

Judicial Scrutiny

Courts are looking closely at this problem. The Supreme Court spoke on the matter earlier this month, while the Odisha High Court raised concerns in January. The High Court pointed out that delays in starting mines—even after getting environmental clearances—cost the state government an average of ₹4,000 crore every year in lost revenue.

Causes And Data

Industry sources who spoke without naming themselves say long forest clearance processes cause the delays. These clearances often take longer than the planned eighteen months. Data from the petitioner group Citizens' Action Forum in Bhubaneswar shows that out of 246 million tonnes per annum of cleared capacity in financial year 2025, only about 159 million tonnes per annum actually started working. Separate figures from the mining consultancy BigMint in June 2026 reveal that Odisha produced 158 million tonnes of iron ore in financial year 2026 against a cleared capacity of 278 million tonnes per annum, showing a capacity use of roughly sixty percent. This unused capacity matters a lot because it mostly involves hematite, which is the best grade of iron ore.

Production And Court Orders

Odisha produced over half of India's total domestic iron ore during financial year 2026. Chhattisgarh made about 17.1 percent, and Karnataka made 16.6 percent. Capacity use in Chhattisgarh and Karnataka reached 62 percent and 80 percent, respectively. The shortfall also means India still relies on imports. The Mines Ministry states that India imported 12.3 million tonnes of iron ore in financial year 2026, spending ₹11,115 crore. In January, the Odisha High Court ordered that mining rights must go to the state-owned National Mineral Development Corporation to ensure best use and stop losses for the government. However, in its November 4 order, the Supreme Court agreed that the country needs the best use of minerals, but left the choice of transferring mining rights up to the State government instead of making it compulsory.

Context

Hematite is a key raw material used to make steel, which is essential for construction and manufacturing across the country. Delays in turning cleared mineral reserves into active mining sites often happen when projects wait for final environmental and forest approvals. This gap between official approval and actual production highlights the ongoing challenge of balancing industrial growth with natural resource management.