Chhattisgarh sponge iron units facing closure on iron ore shortage

Monday, 16 Jan 2012

ET reported that as many as 105 sponge iron units face a serious threat of being shut down amid deepening raw material crisis in Chhattisgarh.

Mr Anil Nachrani president of Chhattisgarh Sponge Iron Manufactures' Association said “Some 20 sponge iron units have been shut down since October 2011 and others have cut short production up to 60% as sponge units are just getting 4 million tonne iron ore as against the requirement of 12 million tonne per annum.”

He said “The future of sponge iron units in the state looks very bleak all of a sudden. The production has come down to a meager 2.5 million tonne per annum from the earlier figure of around 8 million tonne per annum.”

He said “I don't see any improvement in the sponge iron industry in the near future. If things do not improve fast, then all units will have to be shut down. After all, how long will industrialists run loss-making units?”

According to Mr Nachrani, Chhattisgarh accounts for nearly 30% of India's total sponge iron output.

He said the massive decline in sponge iron production was mainly due to the Odisha government's decision to close down dozens of iron ore mines since July 2009 in a bid to cleanse the state of tax evaders and those mining without licenses.

"Some two years back, the iron ore availability was satisfactory as we were getting 9 MT per annum from Odisha and 3 MT per annum from NMDC (National Mineral Development Corporation) from its mines in Dantewada district.

(Sourced from ET)