The Karnataka Iron and Steel Manufacturers’ Association (KISMA) has asked the State Government to speed up the grant of various mining leases to resume iron-ore mining.
Addressing reporters after the KISMA members submitted a memorandum to Karnataka Chief Secretary S.V. Ranganath, M.V.S. Seshagiri Rao, joint managing director and group CFO, JSW Steel, said: “Early clearances from the State government will ease capacity constraints. At present, many steel mills are running below their capacity.”
State resources
“The steel capacity in Karnataka relies solely on the iron-ore sources in the State, which constitute 24 per cent of the total steel production in the country. The total ore requirement of the iron and steel industry in the State is around 33 million tonnes per annum at 80-85 per cent capacity utilisation,” he added.
“After several rounds of auctions till date, around 26 million tonnes of iron ore have been sold. Now it is estimated that around one million tonnes of stock is available,” he added.
Given the very inferior quality of ore and also the non-availability of ore, many mills either closed down or are running at very low capacity utilisation.
As of now, integrated steel plants are running at an average 68 per cent capacity, and sponge iron and pig iron plants are running at 27 per cent and 21 per cent capacity respectively.
According to T. Srinivas Rao, president, Karnataka Sponge Iron Manufacturers Association: “Till date, 37 plants have closed down and others are running at lower capacity.”
Seshagiri Rao said: “In view of NMDC being unable to produce the required capacity and as Category A mines have not yet resumed operations, the future of the iron and steel industry in the State is very grim and bleak. More steel plants will close down in the coming days. Therefore we (KISMA) seek the Government’s intervention on the following for the survival of the steel industry in the State.”
“We have sought early clearances for the remaining Category A and A1 mines and to initiate the process of opening of Category C mines,” he added.
Approvals sought
The opening of Category A, Category A1 and Category B mines, clearances on mining leases awaiting renewal of approval, and resumption of the operations of Mysore Minerals Limited, NMDC, may be directed to ensure iron ore output of one million tonnes per month and to speed up captive mine allocation/long-term linkages.