New Delhi/Bhubaneswar: Tata Steel Ltd resumed production from two of its four iron ore mines on Tuesday, a company source and a government official said, cutting a shortage that had forced the company to import the raw material for the first time.

Court restrictions over the past three years to curb illegal mining have stifled iron ore output in India, which used to be the world’s third largest supplier. As a result, Tata Steel and JSW Steel are turning to imports even as international prices languish.

Tata Steel reopened the iron ore mines in Odisha state after a court directed the local government to let the company operate them until a hearing on 28 January, Odisha’s mines director, Deepak Kumar Mohanty, told Reuters on Wednesday. A company source, who did not want to be named, also confirmed the reopening.

Shares in Tata Steel were up 3% at Rs401.65 in afternoon trade on Wednesday. The stock has fallen about 20% in the past three months, compared with a 0.38% gain in the wider market.

The company was asked to stop production from the two mines last month pending the renewal of their leases. One other mine in Odisha is shut since May and the state was considering a request to let that open as well, Mohanty said.

Tata Steel produces about 10 million tonnes from the mines in Odisha state.

The company is also close to reopening its top mine Noamundi in neighbouring Jharkhand state. The mine, which has a capacity of 10 million tonnes a year, stopped operations in September pending the renewal of its lease.

Mumbai-based Tata Steel needs more than 20 million tonnes of unprocessed iron ore per year to run its 10-million-tonnes-a-year steel plant in the eastern city of Jamshedpur. Most of its steelmaking capacity of 29 million tonnes is in Europe.

The mine closures have forced Tata Steel to resort to iron ore imports for the first time in its 107 years. It has bought 3 million tonnes this fiscal year that began in March, mostly from overseas and from India’s top producer NMDC.

But iron ore transportation costs are a concern for the company as most steel plants are located away from the coasts. Reuters