 "Tata Steel closes Bamnipal plant")
The raw material crisis is precipitated by closure of the company’s Sukinda chrome ore mines, where the work has been suspended since 17th May, this year, because of non-renewal of lease.
When contacted, a Tata Steel spokesperson said, “Ferro Alloys Plant at Bamnipal, designed to produce 50,000 tonne ferrochrome per annum, tried its best to run with available inventory and using innovating practices till 4th August, 2014.”
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“Suspension of operation at Sukinda and Bamnipal has impacted livelihood of more than 6,000 persons with loss of revenue to the government to the tune of Rs 300 crores per annum,” he added.
Even as Tata Steel’s application for renewal of Sukinda lease, which expired in 2013, is pending before the state government, the Odisha High Court has restrained the government from taking any decision on the matter till disposal of petitions challenging the company’s need to retain the full lease area.
Five firms, Indian Metals and Ferro Alloys (IMFA), Balasore Alloys (earlier Ispat Alloys), Jindal Stainless Ltd (JSL), Ferro Alloys Corporation (FACOR) and Nav Bharat having their ferroalloys units in Odisha, have gone to the court seeking reduction in Tata Steel’s chromite lease area.
They pleaded that the chromite reserves in the lease held by Tata Steel far exceeded its requirement while they had partial or no ore linkage for their units. While the first four petitioners have captive mines which partially met their requirement, Nav Bharat does not have a captive mine in the state.
It may be noted, on a similar plea in early ’90s, the Supreme Court had reduced the lease area of Tata Steel from 1,261 hectare to 406 ha in 1993 and ordered redistribution of the balance 855 ha among IMFA, Ispat Alloys, JSL and FACOR.
However, the state-owned Odisha Mining Corporation had then retained 50 per cent of the area freed from Tatas’ hold and distributed the rest area among the contenders.
Arguing that Tata Steel’s captive consumption, as assessed by the Supreme Court appointed Sharma committee in 1993, was 16 million tonne for a period of 20 years, comprising about 20 per cent of the estimated 80 million tonnes reserve at Sukinda mines, the petitioners have now sought further slicing of the Tatas’ lease area and redistribution of the freed area among them.
The next hearing on the case is scheduled in the week beginning August 18.
Initially, the Bamnipal plant was set up by the Orissa Mining Corporation in 1986. But after suffering continuous losses and running at low 50 per cent capacity utilisation for years, it was sold to Tata Steel in September 1991, signifying the first successful divestment of the Odisha government.