Wednesday, Aug 03,
Steel Mills based in Karnataka-based have started panicking as iron ore supplies have started drying up after the Supreme Court’s order of halting mining activities in Bellary.
According to a mill owner, “Steel making cannot be switched on and off abruptly, the stoppage of supplies would affect us severely. Lack of supplies might close the manufacturing activities in coming two-three days.”
Iron ore from Bellary accounts for the production of 20 million tonnes of iron and steel, and firms have urged the government to take prompt action in view of the very low inventory levels.
JSW Steel on Tuesday said it has cut its productions from its Vijayanagar plant in Karnataka’s Bellary district by 35 to 40 per cent due to paucity of iron ore.
“We have reduced our steel production from Vijayanagar by about 35-40 per cent as we don’t have much iron ore inventory left,” said JSW Steel’s Joint Managing Director MVS Seshagiri Rao.
Steel mill owners are seeking for early relief. According to them, the suspension on iron ore mining in India would impact gross domestic product by two per cent.
“With 25 per cent of steel production being forced to shut down in Karnataka, the GDP will be negatively impacted by 0.5 per cent, which amounts to $8.5 billion (at factor cost),” the Bangalore Chamber said.
Analysts have pointed out that shortage of iron and steel would cause an escalation in the prices of automobiles, consumer durables. It would also result in an increase in the cost of construction and infrastructure projects.
Source: Business Today
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