if leases are extended by twothree years for existing mines there will be no supply disruption kolkata with leases for a number of merchant mines set to expire in march 2020 steel makers without captive mines which account for about 75 of the domestic production are likely to face up to 20 increase in coststhis would put pressure on profitability of these companies leading to a 300400 basis point 34 percentage points fall in ebitda earnings before interest tax depreciation and amortisation margins in 202021 according to a new report by crisilin march 2020 leases for more than 30 iron ore mines which account for nearly 62 million tonnes mt of ore comprising 5055 of odishas output and 10 of other states production of around 10 mt are expiring advt this could lead to a 30 reduction in overall iron ore output significantly all these leases are held by merchant minersthe report said that with the expiry of iron ore mining leases nearing there is some uncertainty about the completion and scheduling of auctions for g2 exploration licencesthree possible scenarios could emerge it said read alsosteel min asks industry players to give suggestion to raise quality steel outputjsw steel lines up rs 419 crore to step up its tinplate capacity in the base case assuming auction takes place in the third quarter of 201920 prices are predicted to go up 1520 in 2021 with limited supply disruption if leases are extended by twothree years for existing mines there will be no supply disruptionhowever if there is a delay in auctions which are open to both captive and merchant miners large steel players shall bid higher premiums to ensure longterm supply leading to higher iron ore costs for them the entire supply of 60 mt will come to a halt until new clerances are received leading to iron ore imports at higher prices the report saidin 201819 domestic production of ore is estimated to have been around 207 mt et bureau published on jul 18 2019 at 1105 am ist telegram facebook copy link be the first one to comment comment now comments comment now read comment 1 all comments post post find this comment offensive choose your reason below and click on the submit button this will alert our moderators to take actions reasons for reporting foul language defamatory inciting hatred against a certain community out of context spam others report join the community of 2m industry professionals subscribe to our newsletter to get latest insights analysis download etauto app get realtime updates save your favourite articles scan to download app steel steel prices steel price hike steel industry auto makers auto parts homenewsauto componentssteel makers may see up to 20 rise in cost crisil