Indian sponge iron or direct reduced iron (DRI) manufacturers are facing an acute shortage of iron-ore despite the government liberalising norms for the allocation of iron-oreblocks and with the country poised to achieve a five-year high in the production of the raw material.
The shortage of iron-ore faced by DRI units have become so acute that a Minister of the southern Indian province of Karnataka, in a meeting with federal government officials earlier this week, sought urgent and immediate supplies of raw materials to units located in the southern province.
Karnataka has sought federal government directive to the State-owned and operated largest iron-ore miner NMDC to increase volume shipments to DRI units in the region.
According to Karnataka government officials, an estimated 75% of the 69 sponge iron manufacturing units in the region are either closed down or operating at drastically reduced capacities as a result of the shortage of iron-ore or pellets available in the open market.
This follows persistent pleas by the Karnataka Sponge Iron Manufacturers’ Association for assured supplies of raw material.
In October last year, the association revealed that DRI units were closing down as iron-ore miners were not making any specific allocations to sponge iron producers, with the estimated 27-million tonnes a year of iron-ore production in the province mostly being taken up by integrated steel producers, leaving very little supplies for DRI units which were largely small to medium-sized companies.Read More…