Mining and Mineral-Based Industries in Odisha
The Mining Sector
Mining is the foundational sector of Odisha’s industrial economy, directly extracting value from the state’s geological endowment and supplying raw materials to downstream processing industries. Odisha is the leading mineral-producing state in India by value, accounting for approximately 18-20 per cent of the country’s total mineral production value. The sector is dominated by coal (Mahanadi Coalfields Limited), iron ore, chromite, and bauxite, with significant production of manganese, limestone, and dolomite. The mines are concentrated in the districts of Angul, Jharsuguda, Sundargarh, Keonjhar, Koraput, Jajpur, and Rayagada. The mining sector directly employs approximately 3-4 lakh workers, though a much larger number is indirectly dependent through transport, equipment supply, and services. The royalty and District Mineral Foundation (DMF) revenues from mining are critical sources of revenue for both the state government and the mineral-bearing districts.
The mining industry in Odisha has undergone significant restructuring over the past two decades. The Supreme Court’s intervention in 2014, which banned iron and manganese mining without environmental and forest clearances and ordered a re-assessment of mining leases, led to a temporary halt in production and the subsequent re-allocation of mining leases through auctions rather than direct allotments — a major shift towards transparency. The Mines and Minerals (Development and Regulation) Amendment Act, 2015, which mandated auction of mineral concessions, further institutionalised this change. Currently, mining in Odisha is a mix of public-sector operations (MCL, OMC) and large private players (Tata Steel, Jindal, SAIL), with a decline in small, informal mining operators.
Ferroalloy Industry
The ferroalloy industry is the immediate downstream value addition to chromite and manganese mining and is one of Odisha’s most important industrial sub-sectors. Ferroalloys are essential inputs for steel production, where they impart specific properties: ferrochrome for stainless and alloy steel, ferromanganese and silicomanganese for deoxidation and alloying of carbon steel. The availability of chromite, manganese, and cheap power has made Odisha the leading ferroalloy-producing state in India, with several large and many small production units.
Major plants include Tata Steel’s ferroalloy plant at Bamnipal in Keonjhar (integrated with its captive chromite mines at Sukinda), IMFA’s (Indian Metals and Ferro Alloys) plants at Therubali (Rayagada) and Choudwar (Cuttack), and Jindal Stainless at Kalinganagar. The plants use submerged arc furnaces, which require large quantities of electricity — another reason for their location in Odisha’s power-rich zones. A significant portion of the ferroalloy production is exported to China, Japan, South Korea, and Europe. The industry has faced headwinds from fluctuations in global steel demand, power tariff increases, and the tightening of environmental norms, particularly regarding the disposal of hexavalent chromium-bearing slag.
Cement Industry
The cement industry in Odisha is based on the state’s limestone deposits, primarily in Sundargarh (Biramitrapur) and Bargarh districts, and on the availability of fly ash from thermal power plants as a blending material for Portland Pozzolana Cement (PPC). Major cement plants include ACC Limited at Bargarh (one of ACC’s oldest and largest plants), OCL India Limited (now part of Dalmia Bharat) at Rajgangpur in Sundargarh, UltraTech Cement at Jharsuguda (a grinding unit), and Shree Cement with a new integrated plant near Athagarh in Cuttack district. The cement plants are located close to limestone quarries and coal sources, and many utilise the railway network for dispatch to consuming centres. The demand for cement in Odisha is driven by infrastructure construction (roads, bridges, irrigation projects), housing, and industrial construction, with the state’s large infrastructure pipeline ensuring steady demand growth.
Refractory and Other Mineral-Based Industries
The refractory industry, manufacturing heat-resistant materials for lining furnaces, kilns, and reactors in the steel, cement, glass, and power industries, has a significant presence in Odisha. The raw materials — fireclay, quartzite, dolomite, magnesite, and high-alumina bauxite — are locally available. Plants in the Rourkela-Rajgangpur belt (including the OCL refractory division) supply the national steel industry. The graphite industry in the Rayagada and Bolangir districts processes graphite ore (from local khondalite rocks) into graphite powder and crucibles, used in foundries, batteries, and lubricants. With the emergence of lithium-ion battery manufacturing in India, Odisha’s graphite resources have acquired new strategic significance. The coal washery industry, concentrated in the Talcher and Ib Valley areas, crushes, screens, and washes raw coal to reduce ash content before dispatch to power stations and steel plants, generating substantial volumes of slurry and rejects that pose environmental management challenges.
Environmental and Social Footprint
The mining and mineral-processing industries have left a harsh environmental footprint in Odisha. The open-cast mines scar the landscape permanently. The overburden dumps, covering thousands of hectares, are sources of sediment run-off and are unstable in heavy rain. The chromite mines of Sukinda have created a hexavalent chromium pollution crisis in groundwater and streams that is among the most severe in the world. Coal washery effluents and fly ash from thermal plants affect air and water quality over large areas. The dust from crushers, beneficiation plants, and transportation corridors has created a public health emergency in mining towns like Joda, Barbil, and Talcher. The displacement of tribal and agrarian communities, breakdown of traditional livelihoods, and unequal distribution of the benefits of mining have generated social tensions that periodically erupt into protests and legal challenges. The Supreme Court’s directives on compensatory afforestation, the levy of an additional amount on mining leases for the DMF (2 per cent of royalty for existing leases, 30 per cent of royalty for new leases), and the mandatory requirement of environmental impact assessments have initiated a shift towards greater accountability, but the legacy of decades of poorly regulated extraction will take generations to remediate.