As many as 25 sponge iron industries reeling under severe raw material crises finally closed down the units from today.
Sources in the Chhattisgarh Sponge Iron Manufacturing Association informed that the units, located in different parts of the state, were left with no other option than to close the production after the raw material ran out of stock.
About 125 sponge iron units located in the state were also facing similar problem and could follow the suit, sources said.
As against the demand of 12 million tonnes per annum, these units get only 2.5 million tonnes of iron ore from National Mineral Development Corporation (NMDC), which has major mining facility in Dantewada district of the state.
A delegation of sponge iron industries met the Chief Minister Dr Raman Singh on August 2 and sought his immediate intervention. The industries informed that most of the units were left with the raw material stock of 12-15 days and if the crises continue, the units will be closed from August 15.
The local industrialists had been demanding that the quota of iron ore released by the NMDC for the local units should be increased to 4 million tonnes. The Chief Minister had also asked the NMDC to increase the quota, but the latter did not take any action.
In September 2006, the sponge iron units in the state faced similar crises and about 30 units had to close down the operations. After the intervention of the state government intervened, the NMDC increased the quota by 500000 tonnes (the quota was 2 million tonnes at that time) that helped the units to revive and go on full stream.
