JOIN US Apex industry body Assocham said on Thursday that the sudden Supreme Court order for temporary closure of about 26 mainstream mines in Odisha, which has created severe crisis for the domestic iron and steel industry may result in significant fall in capacity utilisation due to severe paucity of key raw material like iron ore and would lead to rise in finished steel imports.
Assocham said that the recent Supreme Court order to ban illegal mining in Odisha — which accounts for over half of India’s total iron ore production —, may result in domestic iron ore production falling to 100 million tonnes (MT) per annum in the current fiscal of 2014-15, thereby jeopardizing job safety of about 1.25 lakh people directly and indirectly engaged in iron ore production in the country. said D S Rawat, secretary general of Assocham.
“This will not only impact the domestic iron and steel industry, but will also have a cascading effect on other sectors of the economy depending on steel,” said Rawat. “It is high time that effective steps are taken to ensure smooth iron ore supply to India’s iron and steel industry.” “There is a need to temporarily ban iron ore exports from the National Mineral Development Corporation (NMDC) despite commitments made to customers in the international market which can be fulfilled by procuring iron ore from Australia or Brazil, thereby, fulfilling its export obligations; besides, it will also improve NMDC’s export sales realisation which is far lower than domestic sales realisation,” Assocham said further in a communication addressed to Finance Secretary Arvind Mayaram this week.
NMDC is the largest iron ore producer in India with production capacity of 32 million tonnes (MT) per annum. It sells over 90 per cent of its produce in the domestic market apart from exporting to Japan and Korea. In the past two years, NMDC’s iron ore production was over 27 MT in 2012-13 and 30 MT in 2013-14, while it exported about 1.6 MT and 2.5 MT in 2012-13 and 2013-14 respectively.