Hit by iron ore crisis, secondary steel sector industries send SOS to Odisha government

Hit by iron ore crisis, secondary steel sector industries send SOS to Odisha government

ROURKELA: Secondary steel sector industries including sponge iron manufacturers across Odisha have sought urgent intervention of both the Central and State Governments in dealing with the unprecedented shortage of iron ore. Closure of 21 mines due to lapse of leases and non-operation of auctioned mines has resulted in the iron ore crisis in the State.

Odisha Sponge Iron Manufacturers’ Association (OSIMA) chairman Yogesh Dalmia said majority of the 85 sponge iron plants in Odisha, including 45 in Sundargarh, and downstream industries like induction furnace and re-rolling mills manufacturing billets and long products are facing tough times due to the artificial shortage. 

In the last one month, the crisis has worsened with per tonne price of iron ore rising by 60 per cent at Rs 5,220. Besides, sponge iron at its peak price of Rs 21,000 per tonne is leading to losses. Dalmia said the faulty mining policy has led to such a situation. “Instead of feeding the living children, the policy is provisioning to nourish babies yet to be conceived,” he said. 

Under false profit assumptions, successful bidders of auctioned mines seem to have quoted their price at an unreasonably high premium and are now faced with reality of not operating the mines, Dalmia said and added that though pellet is an alternative to iron ore, pellet manufacturers are focused on exports which was adding to the crisis. 

Two days back, OSIMA had written to Chief Minister Naveen Patnaik stating that M/s Sirajuddin, Ghanshyam Mishra and Narbher Ram and Sons have retained their old mines and continue to buy iron ore from market. Similarly, JSW Ltd and its associate BRPL, Amalgam Steels Private Ltd, Ghanshyam Mishra & Atha Group too have got mines and without production, are buying iron ore from the market to create the crisis, it said. 

OSIMA demanded cancellation of leases of idle mines and handing these over to State PSUs, reserving 70 per cent of Calibrated Lump Ore (CLO) for local starving industries and allowing captive mines to sale 25 per cent of their production. 

Separately, OSIMA and its West Bengal and Chhattisgarh counterparts also requested the Union Steel Minister Dharmendra Pradhan to impress on the Centre to restrain export of pellet by increasing levy. The current exports make no incremental foreign exchange earning but hurt national interest, it added. 

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