India’s iron ore production is set to witness a moderate growth of 10-12% to touch a level of 150 million tonnes in 2014-15 after witnessing a minor decline in the fiscal ending March 2014.

The growth in production during the next year is likely to come from Karnataka and Goa, while production cap in Odisha will restrict further growth.

According to miners and analysts tracking the sector, the majority of growth will be seen in Karnataka, where several mines are in the final stages of securing regulatory approvals.

The biggest among all, Sesa Sterlite started production towards the end of December 2013. While other mines like NMDC is gearing up to increase its production and many other companies like Mineral Enterprises Limited is awaiting renewal of its mining lease.

"Unless Goa restarts mining, though partially, we cannot expect big jump in iron ore production next fiscal. Many more mines are set to restart in Karnataka and the total production is unlikely to exceed 20 million tonnes. There is a big suspense over production caps in Odisha based on the Shah Commission recommendations. In total, we can expect around 150 million tonnes of production next fiscal,” Basant Poddar, senior vice president, Federation of Indian Mineral Industries (FIMI) said.

Production of iron ore in 2013-14 is likely to remain flat at around 135 million tonnes, same as the previous year, or it might even decline by 3-5% said analysts.

"The output will be flat year-on-year basis in 2013-14 as Goa was out of business. Jharkhand and Chhattisgarh have more or less remained flat in the current year till now. In Karnataka too, the production is yet to pick up as many leases are still awaiting clearances,” said Ritesh Shah, senior analyst with Espirito Santo

He said the production in 2014-15 could go up to 150-153 million tonnes mainly due to opening up of more mines in Karnataka and partial resumption in Goa.

OreTeam Research, the Delhi-based iron ore research firm has pegged the production for FY15 in excess of 150 million tonnes.

"OreTeam forecast for 2014-15 indicates a better yield in production but not with a bigger margin as production caps could compensate for the increase in mining activity in various parts of the country. Moreover, the mining expansion plans of various miners would also be slow to get through on the back of the political uncertainty at the Centre,” Prakash Duvvuri, Head of Research, OreTeam said.

New mining leases would be hard to come by and the most expected Karnataka’s auctioning system is still awaited by the industry, he said.

OreTeam, however, projects 5-6 million tonnes of increase in iron ore production to cross the 150 million tonne mark for 2014-15.

"Looking into the future beyond 2015-16, the production should increase with a greater intensity and breach the 165 million tonnes mark. A lot would depend on the situation in Goa and Karnataka and the role of Supreme Court in allowing the necessary changes,” Duvvuri added.