Market
Conference
35 sponge iron plants, 46 induction furnace units closed in Orissa
作者：25 发布时间：2010-05-31 文字大小：【大】【中】【小】
BHUBANESWAR: At least 35 sponge iron plants and 46 Induction Furnace (IF) units in the state remain shut down pushing the fate of over 50,000 workers into uncertainty. Still worse is the fact that the remaining 70 sponge iron and another 110 induction furnace units are running at less than 50% of their installed production capacity because of non-availability of iron ore.
According to reports from the Kalinga Nagar Industrial Complex (KNIC), the country’s much touted steel hub that houses 10 steel and sponge iron plants, closure of these units has already led to large-scale unemployment. In KNIC region, at least 15,000 direct employees have been hit by the closure. The number of indirect employees will be several times more.
Besides huge financial losses to the companies and financial institutions, the closure of these units has also threatened to bring down the revenue collections of the state government drastically. Except Mesco Steel, all industries in KNIC region are heading towards closure due to their inability to access iron ore following the exposure of multi-crore mining scam that unfolded in the second half of the last year.
The steel industries not having captive iron ore mines had to source their raw material through the state-owned Orissa Mining Corporation (OMC) and now they are now being made to pay through their noses. The KNIC units are at present buying iron ore at Rs 3,330 per ton, nearly 40% more than the previous year. Similarly, the coal price has gone up by 20% to Rs 800 from Rs 600 last year. Besides, transport cost, electricity charges and operating expenses have gone up by 30% whereas the sales prices have crashed, making the units unviable.
“In Karnataka, the present iron ore price is around Rs 1100- Rs 1200. The cost of production of per ton of sponge iron in that state is around Rs 11,000 whereas it is over Rs 17,000 here. When people here get Karnataka sponge iron at Rs 13,000 per ton, why should they buy the same from us by paying Rs 17,000?” asked KNIA president, Mr P L Kandoi.
The precarious position of the sponge iron units has also raised doubts about the bankers getting back their money. According sources, KNIA members owe Rs 10,000 crore to different financial institutions.
Mining scam in Orissa, which surfaced during the second half of 2009, has badly affected the supply chain of mineral ores to the consumer industries in Orissa. For one reason or other, iron ore mines in the state are either closed or have suspended production for an indefinite period. Loading of railway rakes from Barbil sector has come to a grinding halt since March, 2010.
Mr Kandoi said since most of the industries at Kalinga Nagar had made 100% capital investment of their first stage and some of them have even started expanding their projects, the government must ensure immediate supply of the raw material by opening the local Daitary mines.
The KNIC industries have no other alternative source of supplies of raw material in the same region. They are exclusively dependent on Daitari mine which has remained inoperative for the past six months, badly affecting their operations. Their stocks of iron ore have reached rock-bottom levels, and most units are certainly on the verge of closure.
The only source at Daitari mines is exclusively operated by OMC. Since the KNIC units are exclusively dependant on OMC for iron ore, in the present scenario, their economic viability is exclusively dependant on raw material from the state-owned corporation.
“Raw material from other sources is much costlier due to logistic reason and present market is not supporting such higher raw material cost,” Mr Kandoi observed.
Sourced from www.indiatimes.com
According to reports from the Kalinga Nagar Industrial Complex (KNIC), the country’s much touted steel hub that houses 10 steel and sponge iron plants, closure of these units has already led to large-scale unemployment. In KNIC region, at least 15,000 direct employees have been hit by the closure. The number of indirect employees will be several times more.
Besides huge financial losses to the companies and financial institutions, the closure of these units has also threatened to bring down the revenue collections of the state government drastically. Except Mesco Steel, all industries in KNIC region are heading towards closure due to their inability to access iron ore following the exposure of multi-crore mining scam that unfolded in the second half of the last year.
The steel industries not having captive iron ore mines had to source their raw material through the state-owned Orissa Mining Corporation (OMC) and now they are now being made to pay through their noses. The KNIC units are at present buying iron ore at Rs 3,330 per ton, nearly 40% more than the previous year. Similarly, the coal price has gone up by 20% to Rs 800 from Rs 600 last year. Besides, transport cost, electricity charges and operating expenses have gone up by 30% whereas the sales prices have crashed, making the units unviable.
“In Karnataka, the present iron ore price is around Rs 1100- Rs 1200. The cost of production of per ton of sponge iron in that state is around Rs 11,000 whereas it is over Rs 17,000 here. When people here get Karnataka sponge iron at Rs 13,000 per ton, why should they buy the same from us by paying Rs 17,000?” asked KNIA president, Mr P L Kandoi.
The precarious position of the sponge iron units has also raised doubts about the bankers getting back their money. According sources, KNIA members owe Rs 10,000 crore to different financial institutions.
Mining scam in Orissa, which surfaced during the second half of 2009, has badly affected the supply chain of mineral ores to the consumer industries in Orissa. For one reason or other, iron ore mines in the state are either closed or have suspended production for an indefinite period. Loading of railway rakes from Barbil sector has come to a grinding halt since March, 2010.
Mr Kandoi said since most of the industries at Kalinga Nagar had made 100% capital investment of their first stage and some of them have even started expanding their projects, the government must ensure immediate supply of the raw material by opening the local Daitary mines.
The KNIC industries have no other alternative source of supplies of raw material in the same region. They are exclusively dependent on Daitari mine which has remained inoperative for the past six months, badly affecting their operations. Their stocks of iron ore have reached rock-bottom levels, and most units are certainly on the verge of closure.
The only source at Daitari mines is exclusively operated by OMC. Since the KNIC units are exclusively dependant on OMC for iron ore, in the present scenario, their economic viability is exclusively dependant on raw material from the state-owned corporation.
“Raw material from other sources is much costlier due to logistic reason and present market is not supporting such higher raw material cost,” Mr Kandoi observed.
Sourced from www.indiatimes.com
Tianjin Over World Non Coke Iron Making Technical Consultancy Co.,Ltd. All Rights Reserved
Tel.:+86-22-24410619 Fax:+86-22-24410619
TJ ICP 1100023 Email:info@driinfo.com