West Bengal Small Steel Mills Facing Severe Iron Ore Shortages

The Telegraph reported that mad scramble for iron ore has dealt a major blow to the steel industry in the eastern region of India, especially those located in
West Bengal Small Steel Mills Facing Severe Iron Ore Shortages
West Bengal Small

West Bengal, which sources about 2 million tonnes ore monthly. All small steel mills, who cannot afford to own mines, are in a spot of bother as they depend on the merchant miners for ore. As per report, only 12 merchant mines in Odisha are operational at present, while at least 20 are closed and all 11 such mines in Jharkhand are not in production as well. As a result, availability of iron ore has come down to half and prices nearly doubled to INR 7,500 a tonne for some grades. Small steel mill owners sought the immediate intervention of the central government and proposed a combination of measures such as ban on iron ore and pellet export, fixing iron ore rate or take over closed mines by state or central PSUs. West Bengal Iron & Steel Manufacturers Association president Mr Shankarlal Agarwal said “The industry’s capacity utilisation has come down due to shortage in Bengal. It may go down further. We are ready to pay a higher price but ore should be available.”

After cancellation of iron ore leases on March 31 2020, Indian government auctioned 19 mines in Odisha. Miners and large corporations offered big bucks to get control of the assets. Only two mines were retained by the old leaseholders, while 17 of them changed hands. JSW Steel bagged four mines, while ArcelorMittal and Jindal Steel & Power Ltd grabbed one each. Rungta and Essel Mining etc, who had most of these assets previously, did not go aggressive in the auction. An industry estimate suggests that during April-September only 4.06 million tonnes were produced from these mines, but 93 per cent of them were done by JSW and Mittals to feed their respective plants. These mines had sanction to produce over 24 million tonnes during this period.

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