Steel, ferro-alloy firms to face raw material shortage

Our Bureau Mumbai | Updated on December 20, 2019 Published on December 20, 2019

Seven manganese and four chromite mines to stop production

The steel and ferro-alloy manufacturing companies are expected to face a huge shortage of key raw materials as seven operating manganese mines and four working chromite mines will shut operation in next three months.

This is in line with the new Mines and Minerals Development Act that mandates auction of mining leases that were allotted discretionary by state governments.

The shut down of these mines will wipe out almost 16 per cent manganese ore and 50 per cent chromite production from the domestic market creating unemployment for a long period.

Sunil Duggal, President, Federation of Indian Mineral Industries said the country has a target to increase steel production capacity by 2.11 times to 300 million tonne (mt) from 142 mt in 11 years. This requires 11 mt of manganese ore and 5 mt of chrome ore.

However, the ferro alloy industry in India is being squeezed by weak demand, high power costs, cut-throat competition and stagnating steel demand and production in the country, he said.

With an annual production capacity of 5.15 mt, the ferro-alloy industry is battling a slowdown for last five years and the production of ferro-chrome has stagnated at one mt, ferro-manganese at 0.52 mt and ferro-silicon at 0.09 mt.

Notwithstanding the slowing demand, Duggal said there is huge competition from the global markets and the domestic ferro-alloys industry needs to be promoted through a mix of progressive market development strategies and suitable fiscal measures to offset cheaper imports.

India is endowed with huge resources of 496 mt of manganese ore and 344 mt of chrome ore. Unfortunately, India is importing these minerals despite having 2.7 mt of manganese ore and 3.5 mt of chrome ore production capacity.

The domestic demand of the key raw material is being increasingly met through imports and huge stockpiles of presumably low-grade have built up at the mine-heads.

There is a pressing need for entrepreneurs to beneficiate these low-grade ores for utilisation by domestic ferro-alloys industry, he said.

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Published on December 20, 2019
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