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Chhattisgarh industries struggle with acute shortage of iron ore

Owing to the crisis, major Corporates are seen setting up their industries in places like Odisha, Gujarat and southern states instead of Chhattisgarh.

Published: 27th June 2021 11:48 AM  |   Last Updated: 27th June 2021 11:48 AM   |  A+A-

The state has a share of 20 per cent (4 billion tonne) in iron ore deposit overall.

The state has a share of 20 per cent (4 billion tonne) in iron ore deposit overall.

Express News Service

RAIPUR: Chhattisgarh, the second largest sponge iron producer in the country and the only one to make high grade rails for the Railways, is grappling with acute shortage of iron ore.

The industries in the state are reported to be persistently confronting the issue of demand-supply on iron-ore. Owing to the crisis, major Corporates are seen setting up their industries in places like Odisha, Gujarat and southern states instead of Chhattisgarh.

Total installed capacity of sponge iron in the state is 11.28 MTPA (25 per cent of India) -- effectively contributing for the country as the world’s largest producer at 37 million tonne annually. 

The state has 11.6 million tonne steel capacity and has a share of 20 per cent (4 billion tonne) in iron ore deposit overall.

The mining giant National Mineral Development Corporation (NMDC) is the only commercial miner in the state. The Federation of Indian chambers of Commerce and Industries (FICCI) has stated that the production level of iron ore in Chhattisgarh is almost stagnant for over five years and appealed to the Centre to direct the NMDC to increase the capacity.

“We are deeply concerned as over 89 percent, which is 24 million tonnes of iron ore production of NMDC mines, are being exported outside the state creating a huge scarcity of iron ore in the state. Recently, there has also been an exorbitant surge in prices of iron ore by NMDC”, said Pradeep Tandon, Chairman for state council of FICCI. 

"The cost Rs 3,391 per tonne of fine grade iron ore in April last year was increased to Rs 5,608 per tonne in March this year, registering an increase by 74 per cent. Even for ore lumps the prices has been substantially increased by 57 per cent," FICCI added.

Citing the NMDC record on production details, FICCI pointed out that the stagnant production, much lower than the rated capacity of the nation’s largest iron ore public sector enterprise, is even causing revenue losses of Rs 411 crore annually.

However NMDC officials countered citing that out of the installed capacity of 29 million tonne in Chhattisgarh the organisation is producing close to 92 per cent of its capacity. “There are around 60 customers whom we are providing iron ore to Chhattisgarh. We meet the demands raised by them”, they said. 

NMDC admitted that the rates have increased but felt the need of more railway rakes, doubling of tracks amid the issues of security owing to the presence of Maoists in the region. 

FICCI meanwhile has written to Chhattisgarh Chief Minister Bhupesh Baghel identifying the states that have taken proactive measures to support their state-based end-use plants safeguarding interest of the industries, the revenues for the states besides the employment and value addition in iron and steel industry. 

The corporates have raised demand for pre-emption policy which is first right in raw material provision under the Mineral Concession Rules-2016 under rule number 12 (1) in Chhattisgarh to avert the ongoing mineral crisis by ensuring adequate supply to the industries in the state.

M Nagaraju, additional secretary, ministry of coal, referred Chhattisgarh as crucial for the country especially in the mining, which is a vital sector for development of state and nation.



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