Iron Ore Exports, High Prices Hit Odisha-Based Steel Units

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.