Chhattisgarh sponge iron units facing closure

November 3rd, 2008 - 6:12 pm ICT by IANS  

Raipur, Nov 3 (IANS) Dozens of sponge iron units in Chhattisgarh are facing closure due to recession and high raw material costs, industry officials said Monday. The public sector National Mineral Development Corp has increased the domestic iron-ore prices by 40 percent effective from April 1, plunging the sponge iron industry into crisis, Chhattisgarh Sponge Iron Manufacturers Association president Anil Nachrani said.

“Chhattisgarh’S sponge iron manufacturers have refused to pay the increased price of domestic iron ore to NMDC,” he said.

“The hike in raw materials coupled with economic recession has put the entire sponge iron industry in the state in worst ever crisis,” Nachrani said.

He added that the state has about 125 sponge iron units, of which 30 percent were already closed.

“The other units have curtailed production by up to 50 percent and if the trend continues, they will be forced to stop operations by November-end,” Nachrani said.

Chhattisgarh contributes about 35 percent of the country’s total annual output of nearly 20 million tonnes. Sponge iron is an alternative to steel scrap and is used as a raw material for manufacturing steel products.

Tags: , , , , , , , , ,

Posted in Business |