Iron ore shortage hits Chhattisgarh, Orissa sponge units

RAIPUR/BHUBANESWAR - Sponge iron factories in Chhattisgarh and Orissa have suspended or heavily cut short production due to disruption in the supply of iron ore, industry and trade groups said Monday.

As many as 50 units in Chhattisgarh have suspended production indefinitely and several others have cut production in the past 20 days.

In Orissa, production in about 100 units has been affected due to shortage of the raw material.

Supply of iron ore has been disrupted after several mines were closed in the state’s Keonjhar and Sundergarh districts following a government crackdown on illegal mining.

Orissa produced 70 percent of India’s 222 million tonnes of iron ore in fiscal 2009-2010. Mines in the state also feed units in neighbouring Chhatisgarh and West Bengal.

“Chhattisgarh has 105 sponge iron units having an annual output of 8 million tonnes, but production has been suspended indefinitely at nearly 50 percent of the units mainly because of supply by Orissa-based iron ore private contractors was halted since March 4,” Anil Nachrani, president of Chhattisgarh Sponge Iron Manufacturers’ Association, told IANS.

The state’s sponge iron units need about 12 million tonnes of iron ore a year and 9 million tonnes comes from Orissa alone.

Orissa Sponge Iron Manufacturers’ Association chairman Pradipta Mohanty said shortages had become acute after three railway sidings were closed in the region last month.

“Most of the plants are operating in the state with 50 to 60 per cent capacity since past over a month. The situation is worse now as most of the stocks have exhausted. If the supplies do not get restored most of the plants would be closed down in the next one or two weeks time,” he said.

Investigations into illegal mining in Orissa by various state and central agencies started after some politicians alleged in July that mines were operating without licences. Operations at more than 160 mines in the state have been halted since then as officials found them working without statutory clearances.

The state’s steel and mines secretary AMR Dalwai told IANS that the railway sidings would be allowed to operate only after a written assurance from the railway authorities that they would not allow movement of illegally procured iron ore.

Sponge iron producers supply sponge to secondary steel producers who make items such as ingots, billets, TMT bars mostly used in the infrastructure sector.

– Indo-Asian News Service