Sponge iron units see red

The West Bengal Sponge Iron Manufacturers Association has urged the state government to join hands with Orissa and Jharkhand government in pressurising the central government to regulate iron ore prices and ensure coal linkages to sponge iron units of the region.

The association warned that its members would close down all their units in the state on January 5 if the West Bengal state government did not take any action.

There were 42 sponge iron units in the state employing close to 60,000 people directly and indirectly.

The total number of units in eastern region along with Orissa and Jharkhand was 253.

The secretary of the association, Subhendu Bhattacharya, said iron ore prices had gone up by almost 400 per cent in last three years from Rs 500 per ton in 2002 to Rs 2,400 per ton in 2005.

In contrast, the sponge iron price had remained more or less stable.

The price of sponge iron had gone up by only Rs 500 per ton from Rs 7,700 to Rs 8,200 during the period and most of the units in the eastern region did not have coal linkages.

"These were big problems," he admitted.

According to him, only 11 out of 42 units in West Bengal had coal linkages.

"The central government should regulate the iron ore price and there should be a regulatory body "" otherwise the sector cannot survive", he warned.

"The West Bengal state government should join hands with the governments of Orissa and Jharkhand because units in those states were also facing same problems," he added.

Bhattacharya claimed that more than Rs 2,100 crore had been invested in sponge iron units in Bengal in the last couple of years.

"This sector saw huge investments in the last couple of years and the state should consider the demand," he said.