The Orissa government has constituted a high level committee under the chairmanship of state finance minister Prafulla Ghadai to look into the issue of scarcity of iron ore faced by steel units, including sponge iron producers, in the state.
Apart from Ghadai, the other members of the committee are state industry minister Raghunath Mohanty and law minister Bikram Arukh
“The committee is going to decide how much iron ore produced by the miners in the state should be reserved for use by the domestic steel units. Whether the ratio of iron ore earmarked for domestic use and export of should be 60-40 or 70-30. The committee met three times and the matter has been referred to the Chief Minister”, said industry minister Raghunath Mohanty.
Mohanty was speaking at the 8th Annual General Meeting of Orissa Sponge Iron Manufacturers Association (OSIMA). He admitted that shortage of iron ore for domestic consumption is a problem for the sponge iron manufacturers in the state.
Stating that sponge iron units are using ground water for production, the minister warned they may soon face problem in this regard as the government is planning to bring a bill in the coming monsoon session of the assembly to regulate use of ground water.
It may be noted, the sponge iron industries are contributing Rs 1100 crore to the state exchequer. The total installed capacity of sponge units in the state is 11.55 million tonne per annum (mtpa) and this is likely to go up to 20 mtpa by 2020.
State minister for environment and forest Debi Prasad Mishra urged the industries to adopt new technologies and undertake measures like formation of cluster for ash disposal to contain environment pollution.
Out of 109 sponge iron plants in the state, the government recently shut down 7 units which had failed to upgrade bag filter and install pneumatic dust handling system to control pollution as per the recommendation of the Indian Institute of Technology (IIT)-Kharagpur. While 29 plants have complied, 69 others have partially complied with these norms.
Chairman of OSIMA, PL Mohanty rued that most of the sponge iron plants in Orissa are either running at low capacity of around 35 per cent or closed down due to raw material shortage. While the installed sponge iron capacity in the state is estimated at 15 million tonne, the total production is pegged at 6 million tonne.
He said, the measure cause of deplorable condition of the sponge units is the rising cost of iron ore and coal. Mismatch between the demand and supply has led to escalation in prices.
Out of 88 members of the association, only 15 have mines of their own while the rest are depending on Orissa Mining Corporation(OMC), the largest lessee of iron ore in the state. However, OMC is operating only 10 per cent of its leases impacting the availability of ore.
Mohanty said, if OMC operates at least 50 per cent of its leases then there will be sufficient supply of iron ores.
He also pointed out that the sponge iron industry is given the last priority in the allocation of coal and those having linkage are allocated only 75 per cent of their requirement of which 50 per cent is actually available. “We are getting E and F grade coal which is of lower quality”, he complained.
