CM Help Sought to Tide over Chrome Ore Crisis

Ferrochrome industry has been pushed to the verge of closure on account of severe chrome ore crisis due to non-extension of mining leases

Published: 24th June 2015 06:02 AM  |   Last Updated: 24th June 2015 06:02 AM   |  A+A-

BHUBANESWAR:  Pushed to the verge of closure on account of severe chrome ore crisis due to non-extension of mining leases, the ferrochrome industry in Odisha is crying for urgent attention.

With mining output from three major producers - Tata Steel, Misrilal Mines and BC Mohanty and Sons - dropping to a trickle, the industry has rushed an SoS to Chief Minister Naveen Patnaik seeking his intervention to resolve the issue.

The apex industry body, Indian Chamber of Commerce (ICC), has stated that non-extension of chrome ore mining leases in accordance with the new Mines and Minerals (Development and Regulation) Act, 2015 (MMDR) has not only threatened the plants but is also causing huge revenue loss for the Government.

CM.JPGThe newly amended MMDR Act has allowed extension of lease period of captive mines till 2030 and non-captive mines till 2020. Under the rules, chrome ore mining leases of the three miners are deemed to have been extended up to 2020 as a majority of the mineral is used for non-captive purpose.

But confusion over the status of the leases, particularly of Tata Steel, has stalled the extension process. The Government in its express order in December last year for the third renewal of Tata Steel’s Sukinda mining lease had categorised it as captive mines.

While the express order forced Tata Steel to scale down production to its captive requirement only, it was allowed to lapse since May 31 due to lack of clarity on the lease status to be accorded to the company.

The renewal also hit a roadblock with Jindal Stainless Limited filing a petition with Revision Authority of Union Ministry of Mines alleging violation of Odisha’s own Policy Resolution, 2012 which mandated that the requirement of existing industrial capacity would only be considered. In Tata Steel’s case, the yet to be established Gopalpur plant’s requirement was taken into consideration.

The ICC has, however, contended that the issues do not hold relevance after the MMDR Amendment Act came into force. The Act allows extension for non-captive purpose till 2020 which should be carried forward urgently.

“Due to drop in production and supply, the industry is suffering a shortage of more than 1.75 million tonne per year. The State Government is also resultantly losing `735 crore per year in royalty and district mineral fund revenue per year,” Chairman, ICC Odisha Expert Committee Vishal Agarwal said in a letter to the Chief Minister.

Agarwal said Tata Steel is now producing 0.25 mtpa against 1.84 mtpa in 2011-12. The other two combined produced 0.21 mtpa in 2011-12 but are now closed for want of renewal to March 31, 2020.

The impact is seriously felt on the ferrochrome industry as evident in loss of `725 crore by Jindal Stainless Ltd, `302 crore by VISA Steel and `353 crore by Rohit FerroTech in 2014-15.

“We request the Government to take urgent action for extending the leases till 2020,” Agarwal said.


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