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.
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.
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.
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