The steel units in the State continue to face an acute shortage of iron ore as the Department of Steel & Mines (DoSM) is allegedly sitting over the Inter-Ministerial Group’s (IMG) recommendations on raw material linkages to industries.
In 2012, the State Government formed the IMG under the chairmanship of Minister Finance Prasanna Acharya to suggest ways and means of providing long-term mineral linkages to the industries which have no captive mines.
The IMG had a brief that its recommendations would be given in three months. But the IMG took long nine months to submit its report. It was in June 2013 that the IMG submitted its report to Chief Minister Naveen Patnaik, who sent it to the DoSM for preparing a Cabinet Memorandum. However, the report is yet to come to the Cabinet.
Now, as the general elections approaching fast, it is unlikely that the issue would be considered by the Cabinet before the polls are over and a new Government is in position. In such a situation, several steel units are running at low capacities of 10 per cent to 20 per cent and some steel and sponge iron units have closed down, according to industry sources.
The KJ Ispat unit is put on the Sale list while Maithan Ispat is negotiating with Mesco and Viraj Steel with KJS Alhuwalia to get out of the business. Visa Steel is looking for other options to keep it from bank takeover, said the sources. The steel and sponge iron plants in the State have defaulted over Rs 70,000 crore to banks.
The State Government in December 2012 issued a notification that the mining companies would make available 50 per cent of their iron ore productions to local industries. But these companies have allegedly formed a cartel and offered iron ore at exorbitant prices to the steel units, the industry sources said, adding that the Government-owned Odisha Mining Corporation (OMC) too offers small quantities of ore at high prices.
The State is producing nearly 70 million tonnes of iron ore per annum while the steel and sponge iron units require about 25 MT. But the DoSM is allegedly neither providing 50 per cent of the ore to the local industries nor is it implementing the IMG’s recommendations. The DoSM is only keen on the development of ore trade and not on the steel sector’s growth, alleged the industry sources.