Rourkela: Iron ore end-user industries in Odisha are finding it increasingly tough to get raw materials despite Odisha being one of its biggest producers in the country.
They attribute the prevailing crisis to the inter-state export of iron ore and a sharp rise in prices in recent times. The industry bodies have sought the state government’s immediate intervention and reinstatement of pre-emption rights in the state.
Industry bodies like Confederation of Indian Industries (CII), Odisha State Council; Pellet Manufactures’ Association (PMA) and Odisha Sponge Iron Manufacturers’ Association (OSIMA) in separate letters to Principal Secretary, Steel and Mines, Surendra Kumar, have requested for necessary measures to bail them out of the crisis.
“Big industries and MSMEs have set up plants with a firm commitment from the Odisha government for sustainable supply of iron ore to the state-based plants, under executed MoUs with the state government. However, in recent times, the state-based iron and steel industry has been facing a huge challenge due to rampant inter-state dispatches, low production of iron ore in the state and thus an exponential increase in iron ore prices,” said Chairman, CII Odisha State Council, Manish Kharbandha in his letter to Kumar.
Besides doing value addition to the ore, these units contribute revenue to the state exchequer and provide a livelihood to about 10 lakh people. “It is paradoxical that in spite of Odisha being the largest producer of iron ore and steel with 25% share in steel (33 MTPA), 35% in sponge iron (14 MTPA) and 33% of iron ore pellets (30 MTPA), state-based units are struggling hard to get their main raw material,” Kharbanda noted.
The market prices of iron ore lumps and iron ore fines in Odisha have witnessed an unprecedented rise in prices to as high as Rs 12,500 and Rs 9,500 per ton respectively; about a year ago it was Rs 6000 and Rs 2000 respectively. “Today iron ore in Odisha is the most expensive in India, making it impossible for the state-based industries to remain commercially viable and compete with units, located outside Odisha,” pointed out Chairman, OSIMA, Yogesh Dalmia, in his letter to Kumar.
The industry lobbies identified inter-state export of iron ore as the major reason for the shortage of raw material in Odisha. Against a combined requirement of all iron ore end-user units of about 81.4 million tonne, Odisha has a combined production capacity of about 105 million tonne.
Sources said, about 56 million ton of iron ore was dispatched to outside states from Odisha last year, which is more than half of the total production of iron ore in the state.
“There is an urgent need to reinstate pre-emption rights of iron ore for the state-based plants and curtail rampant diversion and export of the precious iron ore to outside Odisha, ensuring a sustainable supply of usable ore for the end-use plants based in the state, safeguarding the livelihood of lakhs of people,” Dalmia said.
In iron ore-rich Karnataka, pre-emption rights are in vogue, thereby safeguarding the interests of the steel industry there. “There is a total ban of export of iron ore from Karnataka to outside the state, paving the way for large capacity utilisation of the installed plants inside the state. This has resulted in larger revenue, larger employment and greater value addition for Karnataka, with positive integrated impact on upstream and downstream industries under MSME sector,” Kharbandha said.
“Odisha also had a pre-emption right policy in 2013-14 with a similar motive. It has to be reinstated in the greater interests of the state,” Dalmia added.
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