Jajpur: Exorbitant rise in price of iron ore six times in a year as well as a drop in the production of the mineral has sparked fears of closure of the steel plants at Kalinganagar in this district and also in some other parts of the state.
According to reports, experts are hopeful that the steel industry will help in recovering the economy which has been hit hard by the Covid-19 pandemic.
However, the unusual rise in price of iron ore during last one year and drop in the mineral production has hit the steel plants operating in the state. The worst hit is the steel plants that do not have their own captive mines.
These plants are finding it difficult to purchase iron ore at the enhanced price and run their plants.
This has triggered fears of closure of these plants and lay-off among the employees, the report said. Iron ore production has been 142 million tonnes in the 2019-20 fiscal and it declined to 111 million tonnes in the 2020-21 fiscal.
The state has exported 17.4 million tonne of iron in the 2019-20 fiscal, while exports increased to 29 million tonnnes in the 2020-21 fiscal. As a result, the shortfall has been 42 million tonnes this year compared to last year.
This has led to an exorbitant rise in the price of ores which is now a cause of concern among the steel plants as well as their employees.
Reports said that the price of iron ore was Rs 2,200 per tonne in June 2020 while it witnessed a sharp rise next year with the price reaching at Rs 12,000 per tonne in June 2021.
Steel companies like Tata Steel, SAIL, JSW Steel, Arcellor Mittal and JSPL who have their own captive mines have produced 65 million tonnes of iron ore out of the total production of 111 million tonnes in the 2020-21 fiscal.
The state-owned OMC produced 13 million tonnes, Rungta Mines 10 million tonnes, Essel Mining 6 million tonnes and DR Patnaik 4 million tonnes during the last fiscal.
On the other hand, firms like Sirajjudin, Foment, Tarna and Vishal LPG, which have acquired mines through auctions, are yet to start production. As a result, there has been a shortfall of 44 million tonnes of iron ore sold in the open market through e-auction process.
The plants which do have their own captive mines are suffering heavy losses and are buying ores via e-auction process. Recently, steel firms in West Bengal and Chhattisgarh participated in the e-auction floated by the OMC to meet the ore requirement of their plants.
Surprisingly, even the plants having their own captive mines participated in the e-auction. It is alleged that these plants participated in e-auction with an aim to increase the iron ore price.
The claim seems to be true as the price of iron ore put up for auction rose to Rs 11,612 per tonne, which is Rs 4,000 more than the price in the last auction.
This has dealt a heavy blow to the steel firms that do not have their own captive mines. In addition, it has severely affected the steel plants like Adhunik Ispat, Concast Ispat and MSP Ispat, NINL, Mesco Steel and Maithan Ispat in the Kalinganagar Industrial Complex.
Some of these plants have downed their shutters unable to compete in the market owing to the rise in the price of iron ore. The members of Kalinganagar Silpa Sangha have demanded before teh Chief Minister, Chief Secreatry and Steel and Mines Secretary to intervene in this matter.
PNN
