Chhattisgarh Sponge Iron Production Hit

Iron Ore Supplies Disrupted To Almost Half Of Plants

Production at around 50 sponge iron manufacturing plants in the Chhattisgarh region on India has been hit after miners in Orissa stopped supplying iron ore.

"Chhattisgarh has 105 sponge iron units having an annual output of 8 million tonnes, but production has been stopped completely at nearly 50 percent of the units because Orissa-based private contractors have stopped supply since March 4," Anil Nachrani, president of the Chhattisgarh Sponge Iron Manufacturers Association, told reporters. Chhattisgarh accounts for about 30-35 percent of India's annual sponge iron production.

Mr Nachrani said the plants used about 12 million tonnes of iron ore each year, of which 9 million tonnes were supplied by private miners from Orissa's Keonjhar district with the National Mineral Development Corporation provided the remaining 3 million tonnes from its Bailadila mines in Chhattisgarh.

Iron ore supply was disrupted last month after the Orissa government began a crackdown on the alleged illegal mining of iron ore in the state. Supplies to a number of larger companies such as Monnet, Ispat and Sharda Energy have also been hit.

Manufacturers say more units will either suspend or cut production if supply was not restored.