NINL's depleting iron ore stock may impact production

Neelachal Ispat Nigam Limited (NINL), the only public sector steel unit operating at the Kalinga Nagar Industrial Complex in Orissa's Jajpur district, is facing a critical condition due to acute shortage of iron ore fines.

NINL's stock of raw material is fast depleting and the company has barely 4-5 days of iron ore fines. This is likely to impact production at the steel maker's 1.1 million tonne per annum steel plant at Kalinga Nagar.

The stock is on the decline as the company has not been receiving iron ore fines since March 15 from the Daitari mines of the Orissa Mining Corporation (OMC) in Keonjhar district.

According to company authorities, the Railways are not placing rakes against the pending indents of OMC.

P C Sahu, managing director, NINL said, “The Railways are insisting that the district collector has to certify that the iron ore to be carried by the rake is legally mined. We have taken up the issue with the Keonjhar district collector who in turn has informed us that the process is not practicable.”

“Our requirement for iron ore fines is around one lakh tonnes per month and we get 3,500 tonnes per day from the Daitari mines. But since March 15, these supplies have come to a grinding halt, thereby affecting our stock adversely”, he informed.

NINL needs 3500 tonnes of iron ore fines and 1000 tonnes of iron ore lumps per day to maintain its production level. While the company is getting the lumps through the road route, there have been no supplies of iron ore fine.

Adding to the company's woes is the imposition of prohibitory orders by the Orissa government in the three crucial sidings – Banspani, Joda (East) and Jaruli since March 5 to facilitate verification of records of mineral transportation by the Railways in the wake of the illegal mining scam in the state.

Consequently, there have been no supplies of raw material from these sidings to the NINL plant.

It may be noted that the steel maker used to receive around 50,000 tonnes of iron ore fines every month from these sidings. Amid uncertainty in raw material supplies in the days to come and to avert any possible cut in production, NINL has talked to National Mineral Development Corporation (NMDC) to help meet its raw material needs by transporting iron ore from Visakhapatnam.

“We are in talks with NMDC for raw material supplies but iron ore fines if transported from Visakhapatnam will take seven days to reach our plant at Kalinga Nagar. Moreover, we are not a regular customer of NMDC and therefore, cannot be assured of regular and timely supplies of the raw material”, Sahu stated.