ROURKELA | Jun 16, 2015: The dark clouds hovering over the metal manufacturing sector here finally seem to be clearing with availability of iron ore, the basic raw material. The private industries, that had closed down owing to several reasons including shortage of iron ore, are now reopening.
Industry sector in the district took a severe blow in February this year when Kuanrmunda-based Adhunik Metaliks Ltd (AML) and several other companies had to shut shops.
After five months, AML has resumed operation. Industry sources said improvement in availability of iron ore is a positive step and reopening of mines in the twin districts of Sundargarh and Keonjhar would be crucial for their revival.
Deputy Director of Mines (DDM) Salil Behera said this month five closed iron ore mines have reopened and five more are set to restart operation in a month’s time. He said till April, only 17 of around 70 mines were in operation.
Amid hue and cry against illegal mining, shortage of iron ore supply started coming down from 2010 and by end of 2012, the situation worsened due to blanket closure of majority of mines in the two districts with the MB Shah Commission inquiring into it.
After almost 30 months, the situation seems to have improved with gradual reopening of mines.
A local industrialist, Gouri Shankar Agarwal, said price of size ores (iron ores measuring 5 mm to 18 mm) has dropped to about Rs 3900 per tonne while seven months back, it was Rs 5500 per tonne. The transportation cost, though, continues to be abnormally high.
Owing to shortage of iron ore and other reasons, three of the total 45 sponge iron plants in Sundargarh faced total closure while, a host of them saw change in ownership amid erosion of working capital.
The sponge iron plants are still running with 30 to 40 per cent of their capacity. The downstream industries include about 60 induction furnace units and 20 of them are facing total closure while properties of 10 others have already been confiscated by loanee banks. Ten re-rolling mills linked sponge-iron plants and induction furnace units are also in a bad shape.
The combined production capacity of 45 sponge iron plants is around 9000 tonnes per day.
Together, industries of these three categories directly employ 16,000 to 18,000 workers and indirectly provide jobs to 24,000 to 28,000 people. More than half of the direct and indirect workforce is now sitting idle.
Director of Ganesh Metallic Ltd Manoj Agarwal said the Odisha Government is belatedly taking steps in the right direction.
He, however, lamented that the Mahanadi Coalfields Ltd is able to supply only half the amount of coal to industries having linkage facility.
(Source: http://www.newindianexpress.com/)