25 sponge iron units closed in Chhattisgarh

August 14th, 2008 - 4:15 pm ICT by IANS  

Raipur, Aug 14 (IANS) As many as 25 sponge iron units in Chhattisgarh have stopped production from Thursday following a shortage of iron ore, and more will follow suit, a top industry representative here said. “The sponge iron industry here is facing the worst-ever raw material crisis as NMDC (National Mineral Development Corp) is refusing to increase our quota,” Anil Nachrani, president of the Chhattisgarh Sponge Iron Manufacturing Association, told IANS.

The state-owned NMDC, with three mines in Chhattisgarh, is the traditional supplier of iron ore to these units.

The state has 125 sponge iron units, which require 12 million tonnes of iron ore per annum.

Against this, according to Nachrani, these units get only three million tonnes from NMDC.

The iron ore crisis threatens to derail India’s annual sponge iron production as Chhattisgarh contributes about 35 percent of the total production of nearly 20 million tonnes per annum.

The association has urged the steel ministry and the Chhattisgarh government to intervene.

Sponge iron is an alternative to steel scrap, and is used as a raw material for manufacturing steel products.

“The iron-ore crisis problem is very serious, if something is not done urgently to increase quota by NMDC for Chhattisgarh, all the sponge iron units have to be closed down,” Nachrani said.

NMDC, India’s largest iron ore producer and exporter, has three mines in the Bailadila hills in Chhattisgarh’s Dantewada district that jointly produce about 20.5 million tonnes of the company’s total annual production of 27 million tonnes.

But the bulk of NMDC’s production goes to domestic steel majors, with some being exported to Japan and other Asian countries.

“Sponge iron manufacturers in Chhattisgarh have for long been demanding that the quota for the local units be increased, but NMDC has brushed aside our demand,” Nachrani said.

In September 2006 too, the state’s sponge iron units faced an iron ore crisis and 30 units had to stop operations.

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