Sponge iron units in Karnataka struggle to get raw material

17 October 2016

State is rich in iron ore, particularly in Ballari district, the sponge iron units across the State have been struggling to get the basic raw material (iron ore). The workers’ plight knew no bounds especially after the e-auction of iron ore introduced in September 2011, as per the directions of the Supreme Court.

Umpteen representations by the Ballari-based Karnataka Sponge Iron Manufacturers Association (K-SIMA) to powers that be – right from district-level to State-level and at National-level – to come to their rescue by way of exclusive allotment of iron ore to prevent the plants being shut down, has been to no avail so far.

Of the 67 sponge iron units in the State, only 30 are struggling to survive now while the rest have been closed, mainly because of the non availability of raw material, according to T. Srinivas Rao, association president.

The Supreme Court, while hearing the petition against illegal mining, fixed a cap on the production of iron ore to 30 million tonnes per annum.

Presently around 27 million tonnes of ore are being produced. Of this, the big players, JSW Steel and other steel plants in Koppal district, have been procuring the lion’s share and a meagre quantum is available to other small and medium units, with sponge iron units being hardly able to get little over one million tonnes.

“We need iron ore of the size of 5 mm to 10 mm and 10 mm to 20 mm. This is suitable for producing sponge iron. Our requirement is around nine million tonnes per annum. But iron ore of the specified size is not made available in large quantities, even by the State-owned public sector undertakings – National Mineral Development Corporation (NMDC) and Mysuru Minerals Limited (MML). Only a few lots of 1,000 tonnes, each of the specified size of ore are made available, resulting in manufacturers vying among themselves with highest bidder to procure the material and lead to escalation of production cost,” he said.

“Even if we manage to compete with the big players and get big size ore of 10 mm to 40mm, after crushing it to our required sizes, we end up losing a lot as waste in the process on one hand and production becomes unviable on the other”, he said reiterating that the State-owned mining firms should produce iron ore of specified size to cater to the needs of sponge iron units.

Source – The Hindu