Steel companies urge Jharkhand government to expedite lease renewal of iron ore mines

RANCHI: At a time when the state government is attempting to woo investors in automobile, food processing, apparel and other sectors through the newly approved Jharkhand Industrial and Investment Policy of 2021, a major chunk of the state’s steel manufacturers, who do not have captive iron ore mines, have sought the government’s intervention in ensuring seamless supply of raw material for production.
Front-ranking steel manufacturing companies based in Bokaro and Giridih, which manufacture pellets, iron wires, duct pipes and TMT bars, have claimed their production is being hampered due to the state mining department’s delay in renewing the leases of the state’s merchant iron ore mines.
The manufacturers have estimated that steel production in Jharkhand has dropped by nearly 26% from the last fiscal. In FY-2021, the state produced 20.8 million tonnes (MT) of steel compared to 28.2 MT in the 2019-20 FY.
“There is little or no output of iron ore from merchant iron ore mines in the state. The merchant iron ore leases in Jharkhand expired in 2020, and in the last year, these mines have not been producing any ore leading to an acute shortage of iron ore for steel manufacturers in the state. This is creating huge challenges for steel manufacturers,” the management of a leading steel making company said, requesting anonymity.
“What is making matters worse is that some of the existing iron ore suppliers have tied up with local manufacturers, thereby starving Jharkhand-based steel manufacturers of their required iron ore. For example, in Odisha, the Odisha Mining Corporation (OMC) is providing assured supplies to Odisha-based buyers under a long-term linkage policy.
Similarly, the government-owned Steel Authority of India Limited (SAIL) is also selling iron ore from its captive mines in Odisha and Chhattisgarh to local players. There have, however, been no sales from Jharkhand mines. In fact, SAIL has cancelled auctions that it had held in Jharkhand for its local iron ore mines,” the management of another Giridih-based company claimed.
While mines secretary K Srinivasan and officials of the Jharkhand State Mining Development Corporation (JSMDC) did not respond to TOI’s calls, a highly placed official in the state mines directorate said: “The leases of the mines were suspended in March last year after a revision by the Centre in its MMDR Act. At present, none of the steel plants in Jharkhand has been forced to shut their production due to lack of iron ore. However, we are currently in the process of renewing the leases. It will take time.”