Chhattisgarh sponge iron units face closure

August 5th, 2008 - 7:10 pm ICT by IANS  

Raipur, Aug 5 (IANS) About 40 sponge iron units in Chhattisgarh will stop production this month following a severe iron ore shortage, a top official of the industry’s lobby group here said Tuesday. “Most of the units are left with raw material stock of just 12 to 15 days,” Anil Nachrani, president of the Chhattisgarh Sponge Iron Manufacturing Association, told IANS.

“If the crisis continues, about 40 units will start suspending operations from this month,” he added.

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 the state-owned mining company NMDC Ltd.

India’s largest iron ore producer and exporter, National Mineral Development Corpn’s three mines in Chhattisgarh’s Bailadila district account for about 20.5 million tonnes of its total annual ore production of 27 million tonnes.

The bulk of the ore is supplied to 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 genuine demand,” Nachrani said.

The association has urged the steel ministry and the Chhattisgarh government to intervene to save sponge iron units in the state.

In September 2006, the state’s sponge iron units faced a similar crisis and about 30 units had to stop operations.

Chhattisgarh contributes about 35 percent of India’s total annual sponge iron production of nearly 20 million tonnes.

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

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