Iron ore consumption in domestic steel units went up in December after the Odisha government asked the miners to set aside half of their mineral production for local industries.
In December, local crusher units processed 1.27 million tonne iron ore, up 46 per cent from November. Similarly, mineral based industries having captive mines inside and outside of state used 2.1 million tonne iron ore, up from 1.7 million tonne in November, data from state steel and mines department showed for Joda mining circle, the biggest one in the state.
“We can say that now local units do not have supply problem. The miners are inviting us to buy minerals from them,” said Padma Lochan Mohanty, president of Odisha Sponge Iron Manufacturers' Association (OSIMA).
Earlier this month, the state government through an executive order had asked the mine owners to reserve half of the mineral output, after setting aside the quantity required for their captive use, for mandatory sale to local units.
“The state government directs that at least 50 per cent of the iron ore lumps and 50 per cent of the fines from the mines in any month, but not put to captive use by the lessees, shall be sold to the stand alone mineral based industries located in the state, limited to the requirement of such user industries, in an equitable manner, on payment of the prevailing fair market price by the user industries,” the government order on December 5 said.
The decision was taken as the government was concerned about investment climate and industrialization process in the wake of repeated complaints from local industries about raw material problem.
The order has benefited about hundred-odd secondary steel makers of the state, which were facing acute raw material supply crunch with most of the mine owners exporting the mineral abroad, leaving the local steel units high and dry.
Between November and December, iron ore output also went up significantly despite the state government crackdown on miners who were operating their property even after lease expiry, taking advantage of the deemed extension clause of the Mineral Concession Rule, 1960.
Joda produced 4.1 million tonne iron ore in December while in November it was 3.2 million tonne. Since April, the circle has produced 29 million tonne iron ore.
