Bihar Sponge Iron Ltd (BSIL) located in Sarikela Kharsawan, district of Jharkhand has shut down its operations on dispute of non-supply of linkage coal from Central Coalfields Ltd (CCL) a Coal India subsidiary. Over a dispute on supply of linkage coal they have also filed petition in Jharkhand High Court against the CCL's decision to stop coal which is still pending and so it may take more than a month to have a decision and to start its operations again, said by a source from BSIL.
Source added, Bihar Sponge Iron Ltd has incurred huge losses and in future will incur more due to closure of unit.
Company is having a 700 metric tonne (MT) per day capacity and due to linkage coal stoppage it was running on around 70-80MT per day. However to achieve breakeven company need to manufacture minimum around 10,000MT and company was manufacturing only 2500-4000 MT per month.
BSIL was allocated 2,52,000 MT coal per annum from CCL in long-term linkage which was approved by Coal ministry however from 5th February company is not getting coal from CCL. And as coal being the major raw material in sponge iron production it has effected badly in during the time of non supply from CCL. Company has also tried imported coal to run the plant but it was not a viable option for the company and at the end in the second week of August BSIL decided to shut down.
As reported BSIL is promoted in the joint sector by Bihar State Industrial Development Corp, Modi Group, German Investment and Development Company and International Finance Corporation in technical collaboration with Lurgi Metallurgy Germany, is designed to produce 150,000 tonnes of sponge iron per annum.
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