 "Ferrochrome makers want extension of chromite mine leases till 2020")
The ferrro chrome manufacturers were battling an acute shortage of ore due to drop in production and halt in supplies of chrome ore and chrome ore concentrates. Leases held by Misrilal Mines and B C Mohanty are under shutdown while the chrome ore lease of Tata Steel is operating at depleted capacity due to uncertainty over its lease status.
A delegation of ferro chrome players under the banner of Indian Chamber of Commerce (ICC) today called on the state chief secretary, G C Pati and apprised him on the raw material crisis faced by their units.
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In the meeting, they stressed on retaining the non-captive nature of the mines while granting them lease extension as the change in the status of these mines to 'captive' one would dry up the chrome ore supply source for many ferrochrome producers operating without owning mining assets.
Besides, with the new MMDR Amendment Act presecribing that non-captive mines would come up for auction in 2020 and captive mines in 2030, change in the status of the mines from non-captive to captive would result in loss of auction revenue for ten years, they pleaded.
Similarly, as the captive miners are required to raise mineral to the extent of their in-house need, the ore production would fall sharply compared to the previous years, leading to loss of royalty revenue as well, they argued.
Hence, extension of validity of chrome ore mines only upto 2020 with non-captive status would be a win-win situation for the state government, leaseholders and ferro chrome units, said a ferrochrome producer.
"For chrome ore mining leases of Tata Steel, Misrilal Mines and B C Mohanty where mineral is used for other than captive purpose, the Odisha government needs to complete formalities for deemed extension up to March 31, 2020 as per MMDR Amendment Act. Lessees should produce chrome ore/chrome ore concentrates at economically viable prices for survival of ferro chrome and stainless steel plants in the state," the ICC said in its memorandum to the state government.
It may be noted, the state government is losing over Rs 735 crore per annum by way of royalty and District Mineral Fund due to lower chrome ore production from the mines of Tata Steel, Misrilal Mines and B C Mohanty. Tata Steel is currently mining 0.25 million tonne per annum (mtpa) of chrome ore compared to 1.84 million tonne it produced in 2011-12.
Likewise, Misrilal Mines and B C Mohanty mines together clocked 0.21 million tonne chrome ore output in 2011-12 but are currently shut due to want of extension orders by the state government.
An inter-departmental committee of the state government is scheduled to meet on July 7 to consider cases of extension of these chrome ore mines. "We have also made a plea to slash the exorbitant transport rate charged for moving chrome ore," said Vishal Agarwal, chairman, ICC Odisha Expert Committee and vice chairman cum managing director at Visa Steel.
The chamber suggested that transport rates can be brought down by breaking the strong nexus between the influential local people and the transport associations. Presently, the price of transport of chrome ore from Sukinda valley to the running plant is Rs 600 per tonne for a distance of barely 40 km. The cost can be scaled down to realistic level if the state government notifies transport rates and loading of chrome ore is mechanised. ICC also stressed on stepping up production by state run miner Odisha Mining Corporation (OMC) at its operating and non-operating chrome ore mines and also hike output of chrome ore concentrates at ots chrome ore beneficiation plants. To ensure a level playing field, the industry body held that the Union mines ministry needs to include chrome ore and manganese ores in the list of minerals to be auctioned.