 "Will have to import iron ore if Odisha output does not improve: Naveen Jindal")
Jindal Steel and Power Ltd (JSPL) is considering to import iron ore to run its 2.5 million tonne per annum (MTPA) integrated steel plant at Angul due to supply problem in Odisha, said Naveen Jindal, chairman of the company today.
"We are planning to import iron ore (to run our Angul plant). It is unfortunate that we have to do so despite being located in a raw material rich state. The state government must take steps to boost output, otherwise the high cost of ore will affect all steel projects," he said after meeting chief minister Naveen Patnaik and chief secretary G C Pati here.
This is the third meeting of Jindal since May this year, as its steel and pellet making units have been facing raw material supply issue after the Odisha government suspended mining operation of its regular supplier Sarada Mines.
In April this year, operation of Thakurani-B mining lease belonging to Sarada Mines Private Ltd was suspended by the steel and mines department citing unavailability of environment clearance. Though Sarada Mines sources said they already have obtained the clearance from the Union Ministry of Forest and Environment (MoEF), the state department said it has not received the letter.
JSPL was sourcing iron ore fines produced from Thakurani for its five million tonne per annum (mtpa) pellet plant at Barbil and lumpy ore for its 3 mtpa steel unit in Raigarh, Chhattisgarh. It had also plans to source iron ore for its sponge iron unit at Angul, construction of which has already been completed.
Though JSPL has the option to buy from other private miners, shutdown of 26 large mines earlier this year by the Supreme Court has squeezed supplies in the state.
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"There is acute shortage of iron ore in Odisha and the prices are much higher whereas steel prices are not that costly. The state government must take steps to boost iron ore output in Odisha," said Jindal.
According to projection of mines directorate, iron ore output in Odisha could be 28 million tonne by end of March 2015 due to the shutdown, compared with 62 million tonne excavated last year. Though the state government has taken measures to open eight mines by using special provisions and has allowed transportation of previous year stocks, still the total availability would be around 43 million tonne, less than the 57 million tonne dispatch capping limit fixed by it.
Last month, the state government requested the Centre to allow four mining companies to raise mineral output as per their approved mining plans totalling 16 million tonne additional output per year, since output restrictions on large iron ore miners has resulted in Rs 900 crore deficit in mining revenue collection compared to the target upto October.