Chhattisgarh Chief Minister Bhupesh Baghel has sought an immediate rollback of increased iron ore prices at NMDC mines in order to ensure regular supply of iron ore to local industries and demanded that a long-term concession rate be fixed.
In a letter to Union Steel Minister Dharmendra Pradhan on Tuesday, the Chief Minister said that due to the unprecedented hike in the price of iron ore, local small industries as well as steel and sponge iron industries are facing huge difficulties in procuring it from NMDC mines in Chhattisgarh.
This has interrupted steel production.
He said that due to the dragging lockdown caused by Covid-19, all economic activities in the state have been badly hit. Iron ore-based Small and Sponge Iron units in Chhattisgarh are on the verge of closure due to non-availability of iron ore at concessional rates in NDMC mines, leading to unemployment and exodus of labourers.
Baghel said he is yet to be told about the steps taken in response to his earlier letter of January 23,.
He quoted the Sponge Iron Association as saying that NMDC has hiked the basic price of iron ore lump and DRCLO by Rs 230 per tonne. Again on January 22, the price has been increased by Rs 470 per tonne.
Thus, in the last 16 days, the basic price of iron ore, lump and DRCLO, has gone up by Rs 700. This basic price coupled with royalty and other taxes meant the price of iron ore stood at Rs 875 per tonne, leading to a hike in the price of steel by Rs 2,000 per tonne.
Pointing out that the state government has extended the lease of four iron ore mines of NMDC in 2019 for 20 years, the Chief Minister said that it was mentioned in the deeds that NMDC will facilitate regular supply of iron ore to iron ore-based industries operating in Chhattisgarh at concessional rate.
World class iron ore mines are situated in Dantewada district, where NMDC is operating five commercial mines. There are iron-ore based small and sponge iron plants in various industrial areas of the state which procure iron-ore from NMDC mines at concession rates.
The Chief Minister said that NMDC had on September 25, 2019 said that it has agreed to provide iron ore at 13 percent concession rate from June 2019 and to maintain regular supply of iron ore to Small and Sponge Iron units in Chhattisgarh.
In view of all this, the hiked iron ore rates by NMDC must be withdrawn immediately and a long- term concessional rate fixed for iron ore-based Small and Sponge Iron units in Chhattisgarh.