Promoters of about 200 mid-sized and small scale steel units
in Odisha have decided to surrender their units to chief minister Naveen
Patnaik to protest the government's lack of concern in addressing surging
production costs and unavailability of iron ore.
The move by the steel firms, a first in Indian steel industry will see about 3 million tonnes of steel and
sponge iron products come off the steel market, compounding the shortage
already caused by the suspension of mining in Karnataka.
“There is a huge price mismatch between prices of iron ore and finished
steel,” said Rathi Steel and Power CEO Udit Rathi. “The
current prices of ore are even higher than peak prices in 2008, whereas steel
prices are lower by 25-30% from peak levels.
It is impossible for the industry to absorb this kind of a price disparity. It
is time the government regulates prices of iron ore, which is a natural
resource and which should benefit the nation, rather than benefit few selected
mine owners,” he added.
The Orissa sponge iron sector exists in six clusters –
Sambalpur, Jharsuguda, Rourkela, Angul, Jajpur and Keonjhar. Currently,
about 104 DRI units are in operation in the state with an enhanced installed
capacity of 11.5 million tonnes.
The promoters will
meet at Bhubaneshwar on Monday and try to meet chief minister Naveen Patnaik,
Rajya Sabha member Pyari Mohan Mohapatra and chief secretary BK Patnaik to seek
their intervention in the matter.
Source: The Economic Times
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