 "Truckers' strike in Sundargarh-Keonjhar belt hits pellet, steel units")
Truckers' strike in the mineral rich Sundargarh-Keonjhar belt that entered its 11th day, has paralysed operations of pellet and steel makers in the state.
Jindal Steel & Power Ltd (JSPL) which operates a nine million tonne per annum (mtpa) pellet plant at Barbil has been forced to shut its operations as raw material transport grounded to a halt.
JSPL's pellet unit needs 30,000 tonne of iron ore per day to produce 240,000 tonne of pellets worth Rs 10 crore. Operating without a captive mine, the pellet plant has been struggling to function at 30 per cent capacity.
UK based Stemcor Group controlled Brahmani River Pellets Ltd (BRPL) has also been hit by the transporters' strike.
"Our pellet unit at Jajpur is running as we have raw material stock. But our beneficiation plant has been impacted by the truckers' strike," said N D Rao, managing director, BRPL. "The government is doing the right thing by not succumbing to the pressure of the transporters. After all, pellet makers cannot afford to buy iron ore fines at prohibitive prices due to high transportation costs. I believe the prevailing deadlock on mineral transportation will be over in a day or two," said Rao who is also the president of Pellet Manufacturers' Association of India (PMAI).
Steel makers have been forced to go for production cut due to the ongoing strike.
"Most of the steel units operating at Kalinganagar have been compelled to cut production by 40-50 per cent. There is huge uncertainty on iron ore supplies amid this truckers strike that has moved to the 11th day," said P L Kandoi, president, Kalinganagar Industries Association.
Meanwhile, in the absence of demand for pellets in the domestic market, the pellet plants across the country are operating at only 35 per cent of their combined capacity of 83 mtpa. These units have invested over Rs 40,000 crore.
Pellet industry is also under stress due to flood of cheaper imports. Imported pellets are being sold in the country at Rs 4,500 per tonne while domestic production cost works out to Rs 6,500 a tonne.
In Odisha, the pellet makers have an installed capacity of 27 mtpa out of which the capacity utilisation is 35-40 per cent. "The moot issue for pellet makers is availability of iron ore fines at optimal prices. Though pellet prices have crashed by 44 per cent in the past six months, the prices of fines have not come down proportionately," said an industry source. The agitating truckers are opposing the state government's move to fix a uniform ceiling on mineral transportation rate. As many as 30,000 trucks are off the roads in the Sundargarh-Keonjhar belt, snapping iron ore supplies to the tune of 200,000 tonne every day and causing Rs 12 crore royalty loss per day for the government.
Jindal Steel & Power Ltd (JSPL) which operates a nine million tonne per annum (mtpa) pellet plant at Barbil has been forced to shut its operations as raw material transport grounded to a halt.
JSPL's pellet unit needs 30,000 tonne of iron ore per day to produce 240,000 tonne of pellets worth Rs 10 crore. Operating without a captive mine, the pellet plant has been struggling to function at 30 per cent capacity.
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"The Odisha government has been pro-active in making policy changes to address the issues like exorbitant transport rates and assured supply of raw materials which have been impacting adversely the value addition industries. Now, it is time to act collectively to execute the policies at the ground level in a time bound manner," said Manish Kharbanda, executive director and head of mines at JSPL.
UK based Stemcor Group controlled Brahmani River Pellets Ltd (BRPL) has also been hit by the transporters' strike.
"Our pellet unit at Jajpur is running as we have raw material stock. But our beneficiation plant has been impacted by the truckers' strike," said N D Rao, managing director, BRPL. "The government is doing the right thing by not succumbing to the pressure of the transporters. After all, pellet makers cannot afford to buy iron ore fines at prohibitive prices due to high transportation costs. I believe the prevailing deadlock on mineral transportation will be over in a day or two," said Rao who is also the president of Pellet Manufacturers' Association of India (PMAI).
Steel makers have been forced to go for production cut due to the ongoing strike.
"Most of the steel units operating at Kalinganagar have been compelled to cut production by 40-50 per cent. There is huge uncertainty on iron ore supplies amid this truckers strike that has moved to the 11th day," said P L Kandoi, president, Kalinganagar Industries Association.
Meanwhile, in the absence of demand for pellets in the domestic market, the pellet plants across the country are operating at only 35 per cent of their combined capacity of 83 mtpa. These units have invested over Rs 40,000 crore.
Pellet industry is also under stress due to flood of cheaper imports. Imported pellets are being sold in the country at Rs 4,500 per tonne while domestic production cost works out to Rs 6,500 a tonne.
In Odisha, the pellet makers have an installed capacity of 27 mtpa out of which the capacity utilisation is 35-40 per cent. "The moot issue for pellet makers is availability of iron ore fines at optimal prices. Though pellet prices have crashed by 44 per cent in the past six months, the prices of fines have not come down proportionately," said an industry source. The agitating truckers are opposing the state government's move to fix a uniform ceiling on mineral transportation rate. As many as 30,000 trucks are off the roads in the Sundargarh-Keonjhar belt, snapping iron ore supplies to the tune of 200,000 tonne every day and causing Rs 12 crore royalty loss per day for the government.