Expiring Mine Leases May Hit Steel Sector Hardest

329 mines are to be auctioned, but are not seen fetching good prices, given the prevailing low raw material prices

- Suresh P Iyengar

The leases of 329 mines of private mining companies, including 48 operative and 281 non-operative mines spread across ten States, will expire in the next four months, leading to supply disruptions of key raw materials to various manufacturers.

These mines are slated to be put on auction but may not fetch a good price given the global uncertainties and the prevailing low raw material prices. Also, debt-laden metal companies may not bid aggressively.

Moreover, metal prices, which are in a down-cycle, are not expected to revive any time soon with the US-China trade war persisting despite the talk of imminent resolution. While the mining leases of private commercial miners are being cancelled, the government recently renewed, up to 2030, the leases of captive mines allotted to top corporates.