Steel makers want liquidation of 100 mnt iron ore stock

Last Updated: Sun, Nov 11, 2012 19:40 hrs

Blaming the state government and mine lessees for triggering an artificial crisis of iron ore, the All Odisha Steel Federation (AOSF), a body representing interest of 200-odd steel and sponge iron makers, has demanded liquidation of idle ore stock.

“There is 100 million tonne (mnt) of iron ore stacked up at different mine leases in the state. Even the Shah Commission of enquiry has drawn the attention of the government and mine owners on this matter. Then why not liquidate this excess stock? Where is the need to create an artificial crisis of iron ore at a time when local industries are suffering?” said P L Kandoi, president-AOSF.

“It seems the lessees are determined not to sell this stock to the local steel making units. They are only bent on exporting the raw material which will fetch them higher prices,” he alleged.

Stating that AOSF had a fruitful meeting with the visiting Shah panel, Kandoi said, “We have explained our position to the Shah Commission. The commission members have suggested to the state government that interests of local steel making units have to be protected and their raw material needs to be addressed.”

On the state government’s decision to bring new and surplus mineral bearing areas under control of its PSU- Odisha Mining Corporation (OMC), he said, “This will lead to so much of a burden on OMC as it does not have the requisite infrastructure to handle and operate so many mines together. This will again result in poor and inadequate supply of iron ore to the existing units.”

“As a long-term remedy, OMC must be directed to have joint venture/long-term purchase agreements with all existing units,” the AOSF president suggested.

Asked on the government’s decision to allow mining up to the level of captive consumption, he said, “This is a measure in the right direction where the mine owners are permitted to extract ore up to their actual captive consumption only. The raw material vendors without self-consumption should be thrown out.”

Meanwhile, to enable the sponge iron and steel units starved of iron ore to overcome the crisis, Kandoi said the three-member inter-ministerial committee of the state government should instruct all working mines to feed the state-based steel units.

“The quantity of ore should be pre-empted by OMC and then allotted to the state based steel units on a cost plus basis. Such payments may be kept in separate Escrow account. This will provide immediate oxygen to the dying industries till the time long-term arrangements are formulated,” he added.

AOSF backed the mining department’s move to levy penalty on excess production.

More from Sify: