Industries reel under high cost, shortage of iron ore

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Reeling under exorbitant cost of iron ore amid acute shortage, private sector iron and steel industries in Sundargarh district, mostly in MSME category, have reiterated demand for intervention of the State and Central governments to augment supply with corrective measures.  

The iron ore shortage is due to closure of 21 mines in March, 2020 after end of lease period and non-operation of newly-auctioned mines. Incidentally, SAIL’s two mines in Odisha have started selling 30 per cent of its surplus iron ore, but it is not exclusively meant for industries in the State.

Odisha sponge iron manufacturers’ association (OSIMA) chairman Yogesh Dalmia said in the first week of September, they had drawn attention of Chief Minister Naveen Patnaik and Union Steel Minister Dharmendra Pradhan to the ‘artificial shortage’ of iron ore. However, since then, the situation has further aggravated. 

As many as 85 sponge iron plants in Odisha, including 45 in Sundargarh, along with downstream industries like induction furnace units and re-rolling mills continue to be hit hard due to the shortage. Citing faulty mining policy, Dalmia reiterated the demand for cancellation of leases of newly-auctioned mines lying idle and allowing Odisha Mining Corporation (OMC) to operate these mines. He also reservation of 70 per cent of calibrated lump ore (CLO) for starving local industries and stop on export of iron ore fines.  

Sponge iron industry sources informed that iron ore price per tonne has increased to around Rs 6,000 from Rs 5,200 over the last two months. This has resulted in sponge iron price also increasing to around Rs 22,000 per tonne. The OMC has augmented production but local demand is too huge. Local industrialist Arun Dua said in the last six months, iron ore prices have seen a quantum jump of 60 per cent and urged for immediate corrective steps to save industries.

An official of the Raw Materials Division of SAIL said surplus iron ore worth around Rs 280 crore has been dispatched from Barsuan mine in Sundargarh and Bolani in Keonjhar district to different industries across the country in the last three months. 

General secretary of steel executives’ federation of India Bimal Bisi claimed that SAIL has set a target to sell 43 million tonne of iron ore from mines of adjacent Jharkhand. He hoped that availability of iron ore would improve soon.

Mineral crunch
Iron ore shortage is due to closure of 21 mines after end of lease period and non-operation of newly-auctioned mines
SAIL’s two mines in Odisha have started selling 30 per cent of surplus iron ore but it is not exclusively meant for industries in State
Iron ore price per tonne has increased to around Rs 6,000 from Rs 5,200 in last two months

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