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Orissa's caution on illegal iron-ore sales delays supply to other states

Sponge-iron units and other consuming industries dependent on supplies of iron ore from Orissa face uncertainty after a Government order virtually froze movement of ore from mines in the State to other states. The order by the Deputy Director, Mines, Joda, Keonjhar district, comes close on the heels of the detection of alleged irregularity in utilisation of iron ore by Rashmi Metaliks and Rashmi Cement a few weeks ago.

The Orissa Government order requires iron-ore consuming units located outside the State to submit a plethora of documents confirming proper utilisation of the mineral from 2007-08 to 2009-10. “The verification of the entire procurement in last four years has to be complete first,” according to an Orissa Government source.

"This is important to prevent repetition of Rashmi Metaliks- and Rashmi Cement-like situation wherein large quantities of iron ore meant for domestic consumption were sent to ports by road for exports, thus depriving various government departments of their legitimate revenue earnings.” For example, the Railways alone, sources said, has slapped a claim of several hundred crores on the companies.


But then verification is not easy. The exercise has proved to be tardy. More than 100 firms that have submitted documents for verification over two weeks ago are yet to receive clearance. Another 100 or so, due to submit their documents shortly, keep their fingers crossed.

Even Tata Steel - which sources iron ore from its captive mines located at Joda, among other places - has been subject to verification. “Our documents being perfectly in order, we're not unduly worried but the delayed process has been a matter of concern,” according to a company source. Tata Steel loads on an average four rakes a day at Joda. The average daily loading now has dropped. However, the production in Jamshedpur plant has so far remained unaffected as the company generally maintains a week's stocks, the source points out. Nearly 40 per cent of Tata Steel's daily requirement of 30,000 tonnes of ore is sourced from Joda mines.

Particularly hit are sponge iron units in West Bengal which, unlike their counterparts in Chhattisgarh, cannot access NMDC mines to meet part of their requirements. The State Government's crackdown on illegal coal mines in West Bengal, too, has curbed the supply of cheaper coal to these units.

Meanwhile, inquiries with the South Eastern Railway, the major loader and transporter of iron ore in Orissa, reveal that its iron-ore throughput in October was 4.68 million tonnes (mt) as compared to 6.16 mt in the same month last year. Cumulatively till October, the throughput was 36.98 mt (38.89 mt).

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