Iron Ore Miners In Fear After India Terror Attack

Extortion May Be Behind Deadly Attack

Iron ore miners in Chhattisgarh, India, are said to be in “terror” after the deadly Maoist attack Tuesday in the state's Dantewada district in Bastar region, described as the 'key to India's steel sector growth'.

India's largest iron ore producer, National Mineral Development Corporation (NMDC), produces nearly 80 percent of its annual iron ore output in the area.

“The NMDC production has been unaffected Tuesday in Dantewada but there is absolute panic,” S.P. Himanshu, company deputy general manager based in Dantewada, told the Indian news agency, IANS.

He said: “NMDC has been routinely suffering big losses as Maoists stop iron ore transportation from NMDC Bailadila mines to Visakhapatnam port in Andhra Pradesh at will”.

Raju Nehlani, a private iron ore miner, IANS: “This brutal attack has terrorised iron ore miners to a great extent. I always maintain that Bastar, which has nearly 20 percent of India's iron ore stocks, is fast slipping into Maoist hands and now it is up to the Indian government do something urgently.”

Mr Nehlani said although private miners were hardly ever targeted in Chhattisgarh by Maoists, they often burn mining equipment and transporting vehicles. Also, employees work under extreme tension.

Another private miner suggested that extortion may be behind the attack: “I pay Rs.42 per tonne to Maoists as extortion money and the rebels raise the sum annually by 20 percent”.

Ashok Surana, head of Mini Steel Plant Association, said “The growing activities of Maoists in Bastar are threatening iron ore mining in the sprawling forested region. The iron ore miners fear that the authorities will lose control over the area in the next five years and growth in the steel sector will suffer.”

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.