Monday, July 25,
Karnataka, which accounts for a third of India’s iron ore output, had to suspend operations in about 50 mines affecting supplies to a host of steelmakers and prompting large players such as JSW Steel and Tata Metaliks to consider a stoppage in production.
The closure has led to uncertainty about supplies of about 40 million tonnes of iron ore that comes from the region.
Karnataka supplies iron ore to several steel plants such as JSW Steel, Tata Metaliks, Kirloskar, etc. According to JSW Steel CEO Vinod Nowal, the company’s daily iron ore requirements is 53,000 MT and the company has stock of only 150,000 MT, operations at the plant could likely be stopped.
“Iron ore has no substitute for the production of pig iron and our stock level will last for a very short period. The abrupt closure of mining in Bellary will result in complete stoppage of production at the plant,” vice president of Tata Metaliks, Sudhin Mitter.
Considering the state’s pro-industrial policies and huge availability of iron ore, world’s largest steelmaker ArcelorMittal and South Korea’s Posco and several other medium-size companies such as Adhunik Metaliks and Varun Industries have laid out plans to set up steel plants in the state.
According to an Assocham report the Indian steel industry has invested about Rs 70,000 crore based on supplies of ore from the Bellary-Hospet region. So, the closure of the mines will definitely hit the upcoming plants and might further delay their set up.
The tight supplies of iron ore have already led to a steep rise in the prices of iron ore. This will put a pressure on the margins of the steel and consumer goods companies which are grappling with expensive coking coal, another key element for steelmaking.
Source: The Economic Times
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