Ferrochrome makers demand reopening of shut chromite mines

The closure of some key chromite mines has triggered acute shortfall of chrome ore and ore concentrates for these units

Faced with serious jeopardy in running their units due to inadequate chrome ore supplies, ferrochrome makers in the state have called for reopening of chromite mines that have remained shut since a Supreme Court order on illegal mining in May 2014.

The closure of some key chromite mines has triggered acute shortfall of chrome ore and ore concentrates for these units. The shortage for non-captive ferrochrome units stands at over one million tonne against their annual requirement of 1.4 million tonne.

"Chrome ore production has dropped drastically due to shutdown of mines. As a result, ferrochrome makers are suffering. We have urged the state government to extend the validity of closed chromite mines like they did for iron ore mines, which were also shut on the apex court's order. Now that the government has issued orders for reopening of some iron ore mines, we believe that it will do the same in case of the closed chrome ore mines," said Vishal Agarwal, vice chairman and managing director, Visa Steel and chairman, Odisha expert committee of Indian Chamber of Commerce (ICC).

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Says Rajdeep Mohanty, resident director of Jindal Stainless Ltd (JSL), "Ferro chrome makers are passing through a very bad patch. Production by state run Odisha Mining Corporation (OMC) is not going up. In this scenario, the shut chromite mines need to be reopened so that the raw material can be made available to the non-captive units." The mines where chrome ore is used beyond captive purposes include the ones held by Tata Steel, Misrilal Mines and B C Mohanty & Sons. Total production from these three mines was only 0.25 million tonne in 2014-15.

On behalf of the ferro chrome producers, ICC has written to chief minister Naveen Patnaik and chief secretary G C Pati, making a strong plea to extend the operations of chromite mining leases up to March 31, 2020 as per the Mines and Minerals (Development & Regulation) Act, 2015. "Ferro chrome plants which have made huge investments in setting up the industries for value addition of chrome ore and concentrates in Odisha are under serious jeopardy, as they do not have an assured supply of the basic raw-material feed (chrome ore) required in these plants. Since they do not have any captive chromite mine, they are entirely dependent on supplies from OMC. The supplies are not sufficient for operating all the ferrochrome plants in Odisha", said the letter.

Hence, the chrome ore based industries in the state have been suffering low capacity utilisation or closure due to acute shortage of chrome. These industries, built on public money, have incurred huge losses due to non-availability of chrome ore at viable prices. This is likely to result in revenue loss and create unemployment in the state. The ferrochrome unit without any captive mine should be provided a level playing field vis-à-vis those with captive mines in terms of raw material security, the letter pointed out.

First Published: Jun 10 2015 | 8:36 PM IST

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