Goa sponge iron producers ask govt to ensure raw material supply

Steel and alloy makers have asked the government to ensure supply of iron ore to sponge iron and pig iron units in Goa following a ban on mining operations in the state from March 16 threatening to disrupt supply of raw material.
Iron ore is the key raw material used to produce sponge iron which is used in producing semi-finished steel items, ingots and billets.
In a letter to Steel Secretary Aruna Sharma, the Alloy and Steel Manufacturers Association of Goa said the closure of iron ore mines in Goa from March 16 will adversely impact the industry.
The ministry should intervene and ensure that iron ore supply to pig iron and sponge iron plants, which in turn cater to the local steel industry, does not gets hit, the letter said.

On February 7, the Supreme Court quashed the second renewal of 88 iron ore mining leases in Goa in 2015 and gave time till March 15 to the mining lease holders, who have been granted a second renewal in violation of its previous directions to manage their affairs.
"We are extremely concerned about the security of raw material for the industry as the plants rely upon iron ore produced in Goa for producing sponge iron and pig iron and the secondary steel producers utilise the sponge iron and pig iron to produce steel. One pig iron based plant already closed down many years ago," the association said.

There is one large pig iron plant in Goa, four sponge iron units and 39 secondary steel producers. The sponge and steel industry provides employment to 25,000 people directly and indirectly, it said.

The sector generates around Rs 130 crore revenue in the form of direct taxes and is the sole generator of electricity in state producing over 60 MW power, a major part of which is supplied to the Goa Electricity department at less than Rs 2.5 per unit, it added.
The closure will affect the jobs of those dependent on the sector besides it will hurt various others related to the sector such as transporters, O&M (operations and maintenance) service providers, port services also, the body said.

The ministry has taken many steps to help revive the troubled large steel plants in various parts of the country including Odisha wherein the ministry has played an active role in ensuring continuity of coal and iron ore supplies, the association said.
"We request you to help the small and nascent steel industry. We appeal to you to take steps to resolve these concerns by ensuring continuity of iron ore supply to pig iron plants which in turn catering to the local steel industry," it said.
With the high international coking coal prices, the local industry operates on thin margins and is not in a position to absorb the cost of imported iron ore or logistics from other states, the association added.