India: Sponge iron producers in Chhattisgarh seek govt intervention to tackle iron ore supply, pricing issues

• CG SIMA submits post-meeting request to PMO
• Raw material availability remains key concern

The Chhattisgarh Sponge Iron Manufacturers Association (CG SIMA) has submitted a formal request to the Prime Minister’s Office (PMO) following a meeting held last week with senior government officials, sources said.

In the post-meeting communication, the association reiterated concerns affecting the sponge iron and steel sector and sought policy-level intervention. Key issues highlighted included the high cost of iron ore for units without captive mines, tight availability of iron ore lumps, and rising dependence on pellets amid elevated prices.

Sources familiar with the matter said CG SIMA pointed out that while domestic steel prices have fallen sharply over the past year, raw material prices have not seen a corresponding correction. The association also flagged that rising steel production has increased domestic demand for iron ore, adding pressure on availability and keeping prices elevated.

Only 1 auctioned operational

The representation is understood to have raised concerns over the existing iron ore auction framework, noting that high premiums and delays in statutory clearances have pushed up costs and limited fresh supply. According to the association, the current auction regime has yielded limited new production, with only one virgin iron ore mine commencing operations over the past decade.

As part of its suggestions, CG SIMA President Mr Manish Kumar Mandal has sought a review of export policies for domestically usable iron ore and pellets, rationalisation of iron ore pricing to ensure a level playing field for producers with and without captive mines, and incentives for auctioned mines capable of producing beyond their committed volumes, provided additional material is supplied to the domestic market.

The letter was forwarded through the appropriate government channel as a follow-up to the recent meeting. As of the time of reporting, no official response has been received from the PMO, and industry participants are awaiting further clarity.