West Bengal sponge iron units in jeopardy

The sponge iron units in West Bengal are in peril. Non-availability of iron ore has rendered more than 200 units unviable, putting 2,00,000 jobs at risk.

The West Bengal Iron & Steel Manufacturers Welfare Association has been knocking on the doors of the state governments of West Bengal and Orissa, as well as the Railways, but the persistent problem over the past few months remains unresolved.

The problem is two-fold. First, the government of Orissa promulgated Section 144 and imposed various restrictions, which banned the movement of iron ore from Orissa in general and by rail in particular effective from March 5, 2010.

The importers of iron ore from Orissa usually place the order to the mine owners or authorised agents whose responsibility is to load the material on to the rake.

“We are in no way connected with the illegal trading of iron ore,” said officials from the West Bengal Iron & Steel Manufacturers Association (WBI&SMA).

Early last month, the Orissa government withdrew Section 144, but not a single rake has moved to West Bengal. However, different permits and licences are still awaiting.

“Steel making in West Bengal through sponge iron, induction furnace and rolling mills route has no alternative and all the units will close down due to lack of iron ore,” said a WBI&SMA official.

The West Bengal government has taken up the matter with the Orissa government, but there is another problem facing the units.

Earlier, the units used to get a storage place for material near the siding which Railways has banned.

“Railways will not provide any plot/land for dumping iron ore prior to loading. This is a big bottleneck and needs to be sorted out,” said industry sources.

“We get five hours to load the material on to the rake, it is not possible to do so if the storage place is at a distance,” they added.

Around four million tonnes of iron ore comes from Orissa to feed the sponge iron units, that’s close to 100 per cent of the total requirement.

The buck’s passing from the Orissa government to the Railways and vice versa, but there seems to be no respite from the problem.

The last resort is the Central government and the association is hoping that it will untangle the mess.