Chhattisgarh CM Bhupesh Baghel writes to Union Steel Minister Dharmendra Pradhan; demands fixing long term concessional rates for iron ore

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Raipur: Chhattisgarh Chief Minister Bhupesh Baghel has sought an immediate roll back of increased iron ore prices by NMDC mines in to ensure regular supply of iron ore to local industries and demanded fixing long term concession rate for iron ore.

In his letter written to Union Steel Minister Dharmendra Pradhan yesterday, the chief minister said that due to unprecedented hike in the price of iron ore by NMDC affected from January 20, 2020, local small industries as well as steel and sponge iron industries are facing huge difficulty in procuring iron ore from NMDC mines in Chhattisgarh which has further interrupted steel production.

He said that Chhattisgarh is also under lockdown implemented to prevent the spread of coronavirus pandemic. Due to the long period of lockdown, all kinds of economic activities in the state have been badly affected; especially iron ore based Small and Sponge Iron units in Chhattisgarh are on the verge of closure due to non availability of iron ore as per requirement from NDMC mines in concessional rates, leading to unemployment and exodus of labourers.

Referring to his earlier letter dated January 23, 2020 on the same subject, the chief minister said that he is yet to receive information regarding steps taken in response to it. Mr. Baghel had stated that he was appraised by the Sponge Iron Association that the NMDC has hiked the basic price of iron ore lump and DRCLO by Rs 230 per tonne on the price effective before January 3, 2020. Thereafter, again on January 22, 2020, the price of iron ore – lump and DRCLO has been hiked by Rs 470 per tonne. Thus in the last 16 days, the basic price of iron ore – lump and DRCLO, has been hiked by Rs 700. This basic price coupled with royalty and other taxes, the price of iron ore has been hiked by Rs 875 per tonne, which has further led to hike in the price of steel by Rs 2,000 per tonne.

Mentioning that the state government had extended the lease of four iron ore mines of NMDC in 2019 for 20 years, the chief minister said that it was mentioned in the deeds that NMDC will facilitate regular supply of iron ore to iron ore based industries operating in Chhattisgarh as per their requirement and the condition can be fulfilled only when NMDC fixes long term concessional rate for iron ore.

Mr. Baghel further wrote that Chhattisgarh has an immense resource of various minerals, of which iron-ore is a prime ore. World class iron-ore mines are situated in Dantewada district, where NMDC is operating five commercial mines. There are iron-ore based small and sponge iron plants in various industrial areas of the state, which procures iron-ore from NMDC mines at concession rates.

The Chief Minister in his letter stated that a letter was written to Chairman and Managing Director NMDC on July 11, 2019, urging for supply of iron-ore at concessional rates on the basis of proposal forwarded by State Investment Promotion Board. Accordingly, NMDC through a letter issued on 25 September, 2019, had informed that it had agreed to provide iron-ore at 13 per cent concession rate from June, 2019 and to maintain regular supply of iron ore – lump and DRCLO for iron ore based Small and Sponge Iron units in Chhattisgarh.

The chief minister urged the Union Steel Minister that in view of the above circumstances, hiked iron ore rates by NMDC be withdrawn immediately and a long term concessional rate fixed for iron ore based small and Sponge Iron units in Chhattisgarh.

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