The story of iron ore supply crunch in Bellary is far from over. Steel companies in Bellary continue to struggle even as NMDC struggles to increase its production to 1 million tonnes per annum from the current level of 0.5 million tonnes (mt).
BMM Ispat, JSW, Kalyani, themselves need close to 21.5 mt of iron ore per annum and are therefore running at capacities lower than the required, according to sources.
With the suspension of mining activities in the region, iron ore mining has come to a complete standstill, resulting in severe shortage of raw material for sponge iron manufactures who are dependent on iron ore supply from Bellary, Karnataka. The sponge iron prices in Bellary moved up further by Rs 200/MT on Wednesday.
NMDC which was recently allowed to continue mining produces 65% fines and 35% lumps. Many of the steel manufactures in the region can only consume lumps, further lowering their capacity to use the available iron ore. And multiple steel manufacturers have begun to shut down their operations as steel manufactures have very less iron ore inventory left with them.
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