Ore scarcity: Sponge iron plants send SOS to Odisha government

ROURKELA: Faced with acute shortage of iron ore with unprecedented price hike, the secondary iron and steel industries in Sundargarh and rest of Odisha, mostly in MSME sector, have sent an SOS to the government to bail them out with corrective measures.

Affected industries have alleged artificial shortage with rampant diversion of iron ores to other states and price manipulation by merchant mines. The sponge iron plants and downstream industries - including induction furnace units and rolling mills - under the banner of Odisha Sponge Iron Manufacturing Association (OSIMA) wrote to the Principal Secretary of Steel and Mines Department to ensure assured availability of iron ore at reasonable price.

OSIMA Chairman Yogesh Dalmia said urgent pre-emptive measures are needed to help the struggling small and medium industries engaged in value-addition and generate bulk employment and revenue for Odisha. 

​State-based industries without captive mines need 81.40 million tonne per annum (MTPA) of iron ore, but with bulk iron ores reaching other states for value-addition, they are reaping high revenues from finished products at the cost of Odisha and its industries. This results in end-use plants in the State left to starve for the chief raw-material and forced to procure them at abnormally high prices.

Iron ore production in Odisha dipped by 26 per cent in 2020-21 at 107 MTPA against 145 MTPA in the preceding year following permanent closure of several mines in March 2020. Several merchant mines with combined capacity of 72 MTPA were auctioned, but only two mines of OMC Ltd with 11.98 MTPA capacity started operation.

“Despite everything, the total production capacity of merchant mines in Odisha is about 105 MTPA against 81.40 MTPA demand of Odisha-based plants,” said Damlia, adding the State government has the power to regulate iron ore supply and prices in favour of end-use plants.