40% Sponge Iron Plants in Odisha Closed on Iron Ore Shortage
The Pioneer reported that continuing iron ore shortage has driven Odisha’s steel sector to the brinks of closure. Steel, pellet and sponge iron units have been hit hard due to the high price and low iron ore availability in the state. Out of 109 sponge iron plants, 44 units have already been closed.
Most of the units depend upon merchant mines to meet their iron ore requirements. But increasingly, merchant mines are diverting a large share of iron ore produced in Odisha outside the state. For instance, in the financial year 2019-20 and FY20-21, dispatch of iron ore outside the State was 58% & 60% respectively. This has created a massive gap in demand and supply, leading to a steep rise in iron ore prices and fall in iron ore availability for State based plants.
Recently, more than 15 sponge iron and pellet making companies have applied to the Steel and Mines Department to provide the iron ore under the pre-emption policy of the State Government.