Odisha faces Iron Ore Shortage, Secondary Steel Industries Call for Help

The secondary steel industries across Odisha, including sponge iron manufacturers, have asked for the immediate intervention of both Central and State Governments in dealing with an unexpected shortage of iron ore. The crisis arose largely due to the closure of 21 mines because of the lapse of leases and non-operation of auctioned mines.

According to the chairman of Odisha Sponge Iron Manufacturers’ Association (OSIMA), Yogesh Dalmia, a majority of the 85 sponge iron plants in Odisha, and the downstream industries like induction furnace, re-rolling mills manufacturing billets, and long products are facing tough times due to this shortage.

Over the last one month, the crisis has worsened the situation, with per tonne price of iron ore rising by 60 per cent at Rs 5,220, affecting the sponge iron at its peak price of Rs 21,000 per tonne. This hike in the price is leading to losses. Notably, Dalmia blames the faulty mining policy for this situation.

The bidders of the auctioned mines set their price at an unreasonably high premium over false profit assumptions which resulted in few of the mines not operating. Even though pellets can be an alternative to iron ore, the pellet manufacturers are focused on exports which are adding to the crisis.

The OSIMA has demanded cancellation of leases of idle mines and has requested handing over the mines to the State PSUs. Moreover, reserving 70 per cent of Calibrated Lump Ore (CLO) for local industries and allowing the captive mines to sell 25 percent of their production would also help, the association added.

Along with the OSIMA, the counterparts in West Bengal and Chhattisgarh have also requested Union Steel Minister Dharmendra Pradhan to impose sanctions on the export of pellets to restrain the export. These requests were made citing that the current exports make no incremental foreign exchange earning but hurt the national interest.