Amid the acute shortage of iron ore, industry experts and associations have appealed to the State government to expeditiously provide iron ore under its Pre-Emption scheme and save the sponge, pellet, and steel units in the state.
Closure of these plants in the MSME sector will have a serious adverse impact on the economy and livelihood of millions of people, they said in their fervent appeal to the State government.
About 60 percent of iron ore produced in the state is sold outside Odisha despite protests from state-based plants. There has been a huge gap in demand, supply, and price of iron ore in the State is highest in all of India.
At least 44 sponge iron-making units out of 106 have been closed, and several companies are operating below their installed capacities due to the unavailability of iron ore at competitive prices in Odisha, said the industries associations.
“Today the situation is that the merchant mines are diverting record volumes of iron ore outside Odisha at the cost of state-based industries. Many State-based plants have already applied to the Odisha Government under its pre-emption scheme and are waiting for the allotment of iron ore. The situation is critical, and we appeal to the Chief Minister to rescue the steel sector and MSMEs from this crisis by allotting much-needed iron ore expeditiously” said Brahma Mishra, President of the Utkal Chamber of Commerce and Industry.
“Pre-emption scheme is a brilliant and progressive policy enacted by the Chief Minister that can prevent the sickness and closure of the MSMEs in the steel sector. This can be instrumental in creating more wealth and jobs in the state and help investments,” said Yogesh Dalmia, Chairman of Orissa Sponge Iron Manufacturers’ Association.
“Usually, the economic impact of value addition is at least five times more than that of mining alone. One timeshare of auctioned mines or a part of royalty on minerals is not a sustainable developmental governance model” said BS Pani, an industry veteran.
Recently, several industrial bodies like the Confederation of Indian Industries (CII), the Odisha Sponge Iron Manufacturers Association (OSIMA), and others have requested intervention from the state government to address the iron ore crisis in Odisha.
More than 15 sponge iron and pellet companies are eagerly waiting to receive the allotment of iron ore under the preemption policy.
“It is a grave situation and matter of survival of industries “ observed Pravesh Pandey, General Manager of Arya Steel.
Industries that have not participated or been successful in auction need to get iron ore and the preemption policy is meant for such units. The state can direct the mining leaseholder to provide a certain quantity of ore for sale locally.