The Confederation of Indian Industry (CII) has sought reinstating pre-emption of iron ore for Odisha based end-use plants from the Steel and Mines Department. In a letter to Principal Secretary, Steel and Mines Surendra Kumar,
CII Odisha State Council chairman Manish Kharbanda urged a policy for permanent pre-emption of mineral as per need for State based plants. The CII said in recent times the State based iron and steel industries have been facing huge challenges due to low production of iron ore, rampant inter-State dispatches of ore and exponential increase in iron ore prices.
“The annual iron requirement for the Orissa based steel and iron industry who invested in the State under the promise of iron ore availability is about 112million tonnes (MT) for proper functioning of the plants that generate livelihood of over 10 lakh of natives of Odisha. It is paradoxical that despite Odisha being the largest producer of iron and steel, with 25% share in steel (33mtpa), 35% in sponge iron (14mtpa) and 33% of iron ore pellets (30mtpa), the State based plants are struggling for sustainable supply of iron ore,” said the CII. In the financial year (FY) 2021, iron ore production in the State was about 111MT which was 23% less compared to 145 MT in FY 2020. In terms of Environment Clearance (EC) capacity of 182 MTPA from 43 mines, actual production was only 60%. In this crisis situation, about 46 MT iron ore (84% surge) was exported in FY 2021.The situation may aggravate further endangering production from value-based industries in the State, unless immediate steps are taken to address the critical issue of availability, said Kharbanda.
He sought a pre-emption policy in Odisha on line of Karnataka where entire iron ore produced under merchant category is sold to the State based value added plants. “There is total ban on export of ore outside Karnataka.
The policy initiative has paved the way for larger capacity utilization of installed plants in Karnataka resulting in larger State revenues, State employment and State value addition, with positive integrated impact on upstream and downstream industries under MSME sector, said Kharbanda. He further requested the State Government for quarterly/monthly demand assessment for State based plants and issue of pre-emption letter in the beginning of the quarter or month. Besides, he urged that the mining lessee may be directed to deliver the iron ore at the end use plant at reasonable transportation rates fixed by the State Government that may be charged from the buyer and severe penalties on mining lessees may be imposed for lapses and according the State based plants to the Right of First Refusal (ROFR) on all non-pre-empted ore from merchant mines that is intended to be diverted or exported outside Odisha.