THE YEAR IN BRIEF
Production of Crude ore at Karnataka stood at 5.60 wet million tons. With the order of Central Empowered Committee (Supreme Court appointed body) on 21 March 2020, our annual mining capacity has been increased up to 5.89 mtpa. In line with this, the Government of Karnataka on February 2021 has allocated the production quantity of 5.60 wet million tons for FY2021 to maintain the Supreme Court allocated district cap.
Meanwhile, operations in Goa remained in suspension in FY2021 due to a state-wide directive from the Supreme Court. However, we continue to engage with the government to secure a resumption of mining operations.
THE YEAR IN BRIEF
Production of Crude ore at Karnataka stood at 5.60 wet million tons. With the order of Central Empowered Committee (Supreme Court appointed body) on 21 March 2020, our annual mining capacity has been increased up to 5.89 mtpa. In line with this, the Government of Karnataka on February 2021 has allocated the production quantity of 5.60 wet million tons for FY2021 to maintain the Supreme Court allocated district cap.
Meanwhile, operations in Goa remained in suspension in FY2021 due to a state-wide directive from the Supreme Court. However, we continue to engage with the government to secure a resumption of mining operations.
OCCUPATIONAL HEALTH & SAFETY
In-spite of our best efforts towards the vision of zero harm, we are very sorry to inform that we lost one of our business partner colleagues at our Karnataka operations in a fatal accident at the mobile screening plant. This has appalled the entire management and we thus undertook to review all our activities for the risk perception and on ground implementation of controls. Our Lost Time Injury Frequency Rate (LTIFR) has increased to 0.56 (FY 2020:0.45).
We engaged a third-party consultant to identify the hidden risk in our operations and further strengthened our grid owner systems with focus on implementation of Vedanta Safety performance standard on ground.
We have a robust top-down approach with more than 95% month on month compliance for Visible Felt Leadership rounds including the ExCo. Collective efforts of our enthusiastic business partners, grid owners and line managers has been effective in ensuring critical controls in place for all identified Critical Activities.
IOB has implemented more focused initiatives to improve vehicle and driving safety. At Iron ore Karnataka all our drivers working in mining are trained by OEMs, and at VAB, we have developed internal trainers for vehicle and driving safety with greater focus given on one way-traffic, pedestrian walkways, discipline parking of trucks and HEMM, pre-start inspection etc.
Our one of its kind Grid Owners Scheme has proved to be the essence for inculcating and percolating the true values of Safety leadership at site level. With each grid owner working as a responsible steward, our BUs have seen commendable positivity and enthusiasm towards compliance with not just safety standards but also green belt development, waste segregation, UA/UC reporting, critical task management, etc.
With the wholehearted involvement of our line managers, we had run a theme-based safety campaign on “Line of Fire at Workplace” which included site rounds, on-site trainings, awareness sessions, online sessions, online quiz, poster and slogan competitions, daily mailers and screensavers. The campaign helped us to identify and control situations and conditions of line of fire across all BUs. Post this successful and well-accepted campaign, we will be organising similar theme-based campaigns every quarter to strengthen the safety culture of our business.
Grid Owners Scheme
One-of-its-kind programme implemented to encourage Safety leadership
With the persistent pandemic of COVID-19 across the nation, top management team of IOB has been driving continual efforts to restrict spread of the COVID-19 among our employees and business partners. After a small duration of shutdown due to ‘Janata curfew’ and nation-wide lockdown in the month of April 2020, we were able to restart majority of our operations by the last week of April. Till date we have tested up to 1,400 staff, workmen and business partner employees under travel and contact tracing guidelines. We have had 318 persons who were found positive.
Our IOB COVID-19 taskforce, under the guidance of our CEO and unit wise cross functional teams, for implementation of all the preventive and precautionary measures, is engaged in prevention and control of the virus. Controls like cold fumigation for common areas, mandatory screening, social distancing, usage of masks, contact tracing, work from home, etc. proved effective and steered us to maintain our business continuity. Also, our state-of-the-art video analytics system called COVID Marshall which was rolled out by our Security and IT team, gave us an edge to ensure compliance of social distancing, mask compliance, etc. The solution was extended to other group companies as a best practice. One of the major milestones achieved during this phase was that we were able complete the BF#3 re-lining project at VAB with zero outbreaks of COVID-19 among project workers and employees which was an outcome of testing at source and destination for the project workmen and strict controls on site.
Our focus for the upcoming year would be on strengthening the controls of critical activities, business partner safety management, centralisation, and standardisation of HSE trainings, up-grade of incident investigation methods and digital transformation in HSE functions for effective management.
ENVIRONMENT
At our Value-Added Business we recycle and reuse almost all the wastewater. Only the non-contact type condenser cooling water of the power plant is cooled and treated for pH adjustment and discharged back into the Mandovi river, which is a consented activity by the authorities.
We have further strengthened our dust control system by installing new bag houses systems with advanced design at our Blast furnace 2 and Coke screening
plant 1 & 2.
At Iron ore Karnataka, continuing with its best practices, the Company has constructed 38 check dams, 7 settling ponds and 2 harvesting pits having a rainwater harvesting potential of 2,75,805 m3/annum. Additionally, the Company de-silted 10 nearby village ponds increasing their rainwater harvesting potential by
75,629 m3/annum.
In FY2021, around 5 Ha of mining dump slope was covered with biodegradable geotextiles to prevent soil erosion and 41,000 native species saplings were planted. Various latest technologies like use of fog guns; environmentally-friendly dust suppressants mixed with water were adopted on the mines to reduce water consumption for dust suppression without affecting the effectiveness of the measures.
AWARDS AND ACCOLADES
PRODUCTION PERFORMANCE
(` crore, unless stated)
| Particulars | FY2021 | FY2020 | % change |
|---|---|---|---|
| Production (dmt) | |||
| Saleable ore | 5.0 | 4.4 | 15 |
| Goa | - | - | - |
| Karnataka | 5.0 | 4.4 | 15 |
| Pig iron (kt) | 596 | 681 | (12) |
| Sales (dmt) | |||
| Iron ore | 6.5 | 6.6 | (2) |
| Goa | 2.1 | 0.9 | - |
| Karnataka | 4.4 | 5.8 | (24) |
| Pig iron (kt) | 609 | 666 | (8) |
OPERATIONS
At Karnataka, production was 5 million tonnes, 15% higher y-o-y. Sales in FY2021 were 4.4 million tonnes, 24% lower y-o-y due to COVID-19 impact. Production of pig iron was 596,197 tonnes in FY2021, down by 12% y-o-y due to COVID-19 impact and shut down of plant for two months due to planned relining activity.
At Goa, mining was brought to a halt pursuant to the Supreme Court judgement dated 7 February 2018 directing all companies in Goa to stop mining operations with effect from 16 March 2018. We continue to engage with the government for the resumption of mining operations.
We bought low grade iron ore in auctions held by Goa Government in Auction No -23 & 24. This ore along with opening stock of ore purchased in 22nd auction and fresh royalty paid on ore moved out of mines post the Supreme Court order, was exported which further helped us to cover our fixed cost. Some ore was used to cater to the requirement of our pig iron plat at Amona.
FINANCIAL PERFORMANCE
(` crore, unless stated)
| Particulars | FY2021 | FY2020 | % change |
|---|---|---|---|
| Revenue | 4,528 | 3,463 | 31 |
| EBITDA | 1,804 | 878 | - |
| EBITDA margin | 40% | 25% | - |
*Excluding one-offs
In FY2021, revenue increased to `4,528 crore, 31% higher y-o-y mainly due twofold increase in sales volume at Goa and improved margin at Goa, Karnataka and VAB during the year. EBITDA increase to `1,804 crore compared with `878 crore in FY2020 was mainly due to improved margin and higher volume at Goa.
STRATEGIC PRIORIES & OUTLOOK
Our near-term priorities comprise:
