OdishaPlus Bureau
In a bid to alleviate the fear of steelmakers, the Union Government has urged State government to prepare an action plan keeping in view the likely crisis of shortage of iron ore as the major mining leases are going to expire on March 31, 2020.
Expressing concern over the matter, major steelmakers have approached the Union Government to intervene as the crisis of raw material shortage is looming large.
Secretary Ministry of Steel Binoy Kumar has written to the State Government in this regard.“An Action Plan is needed to overcome the shortage of iron ore due to likely disruption to occurred as more than 250 iron ore mining leases are expiring on March 31, 2020”, said Kumar in his letter to the State Government.
About 70 percent of the country’s non-integrated steel plants, which do not have captive iron ore resources and dependent on supplies by merchant miners are likely to face huge shortage of iron ore. According to sources, any uncertainties in supply or pricing of the ore would significantly impact the steel sector’s production and profitability.
As per estimates, there will be a shortage of over 50 million tons of iron ore as and when the leases expire. The shortage of domestic iron ore supply will necessitate an increase in the import of iron ore mix which will potentially lead to an increase in the cost of production, say officials.
Besides, operations of smaller companies that are away from ports and operate in the landlocked region could be disrupted as they are primarily dependent on domestic merchant miners for iron ore.
While the Ministry of Steel is requesting Odisha, Goa, Karnataka, Chhattisgarh and other minerals rich states, it is time and again reminding Odisha to get ready with arrangements to bail out the steelmakers.
Meanwhile, official sources said the State government is chalking out an action plan to meet the situation apart from expediting the process of auction of iron ore mines.
As many as 12 iron ore mines will under the process which has already started, officials said while asserting that there will be no delay in the auction.
Experts are apprehensive about the provision of statutory clearances after the auction as they take longer period to avail.
Under this backdrop, the Union Government is harping on reforms through the ease of doing business, so that statutory clearances are availed at the earliest.