NMDC moves in to meet Chhattisgarh's demand for iron ore

Friday, December 03,

NMDC Ltd has initiated a move to meet the burgeoning demand of Chhattisgarh sponge iron producers for iron ore.

“From Monday, we’ve started moving three rakes of ore a day , totalling about 12,000 tonnes, into Chhattisgarh to meet the requirement of mini steel plants located in the State, and it will continue for some time,” said, Mr Rana Som, Chairman and Managing Director of NMDC.

“This is in response to the request from the Chhattisgarh Chief Minister, Dr Raman Singh, who was approached by the Chhattisgarh Sponge Manufacturers Association and Chhattisgarh Mini Steel Plants Association on Monday not only to look into the iron ore issue but also various other issues.”

Traditionally, the Chhattisgarh sponge iron units depended largely on Orissa’s mines, mostly privately-owned, for the supply of iron ore. A total of 110 units require an estimated 10 million tonnes of ore annually, 70 per cent of which is met by the mines in Keonjhar district of Orissa and the balance 30 per cent by NMDC’s mines in Chhattisgarh.

For various reasons, the sponge iron producers of Chhattisgarh are not too happy with Orissa’s supply. The price of course is a major factor. The Orissa price is around Rs 6,000 a tonne compared with the NMDC price of around Rs 4,000 a tonne. Also, the Orissa Government’s crackdown on illegal mining rendered supply from Keonjhar uncertain. Finally, the Orissa miners, it is complained, are passing the burden of royalty, estimated at 10 per cent of the iron ore price, on to consumers, who are now turning to NMDC for larger supply.

Mr Ashok Surana, President of Chhattisgarh Mini Steel Plants Association, told that the Chief Minister’s attention had also been drawn to high electricity tariff — Rs 310 a KVA. “We want it to be brought down to 155 a KVA,” Mr Surana said. “We’ve also urged the Chief Minister to do away with eight per cent electricity duty.”

There are 175 mini steel plants in Chhattisgarh, and 135 of them are dependent on Chhattisgarh State Electricity Board for supply of power, while the balance 40 have captive power facilities. “More than 60 units, all dependent on the State Electricity Board, have stopped production,” Mr Surana observed. “We will review the situation after a week,” he said.

Source: The Business Line