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Sponge iron industries facing worst ever crisis

The sponge iron industry in district is facing its worst ever raw material crises thanks restriction imposed on outflow of iron ore from Karnataka and Odisha. While dried up iron ore supply has forced couple of sponge iron plants to shut their production, others are running their units at less than half of their capacity.

It is almost three months these industries are facing the heat of raw material crises and if the trend continues they could be forced to lay off workers rendering hundreds of workers jobless. The crisis has also adversely affected the work of couple of upcoming sponge iron units in Mul tehsil.

Sponge iron industries are comparatively low cost industries and are established at places where its raw material, coal and iron ore, is readily available In Maharashtra the cluster of sponge iron industries has come up in Chandrapur, a coal abundant area, however the poor mineral policy of state in relation to these industries has pushed them into grave difficulty.

There are seven sponge iron units in Chandrapur district. Gupta Metalics Ltd located at Chunala in Rajura tehsil closed its unit permanently, while other six are reeling under grave raw material crisis.

"Irregularities busted in iron ore mines in Karnataka and Odisha has led to this situation. Both the states were main iron ore suppliers to the sponge iron industries in Maharashtra. But, since both have banned the transport of iron ore out of the state, our raw material supply has been stranded, leading to heavy cut-down in the production," said vice-president, Chaman Metalics, SK Sharma. Chaman Metalics has shut down its operations since some weeks.

He claimed that sponge-iron industries came to Chandrpaur as coal, one of the two raw materials they need, is readily available here. Iron ore mines in Hospate and Billari in Karnataka were main source of iron ore for industries here. "It is liability of state government to ensure availability of iron ore, the other raw material we needed. There are huge deposits of iron ore in Surjagarh in Gadchiroli and industries have obtained mining blocks there, thanks to Naxal hurdle none have dared to start mining of the mineral," Sharma said. He maintained that government should resolve Naxal problem and pave the way for iron ore mining in Gadchiroli district.

President of Chandrapur MIDC Industries Association Madhusudan Rungta informed that raw material crisis has led to direct loss of government revenue of Rs 12 crores per month obtained against excise duty from sponge iron units here. In addition to this there is a loss of revenue of Rs 6 crore per month against the sales tax from these units. "While there is loss of government revenue, the continuation of crisis could lead to employment problem. Sponge iron units incurring heavy losses could resort laying off employees and hundreds of workers would be rendered jobless," he said.