Members of CSSMA Raise Concern Regarding the Pressing Issue of Steel and Pellet Industry

Chhattisgarh Sponge and Steel Manufacturers Association (CSSMA) bring forth the requirements and hardships being faced by the members…

Chhattisgarh Sponge and Steel Manufacturers Association (CSSMA) bring forth the requirements and hardships being faced by the members who are also the major sponge iron manufacturers in the state. This body was formed to protect the ever-growing needs of the industry in an evolving business environment. In a bid to prevent Pellet businesses and Industries from becoming unviable in the near future, the Chhattisgarh Sponge and Steel Manufacturers Association (CSSMA) have made several representations at various levels of the concerned Ministries, addressing the problems being faced by its members. From being banned to being imposed with an export duty on pellets, the domestic sector concurs that a motivated and biased representation by another association of sponge manufacturers in the state, CGSIMA will create consequential challenges for many. Concurrently, it will create a huge set back in investments and foreign exchange.

Commenting on the scenario, Secretary-General Mr. Moitra of CSSMA said, “Pellets are value-added products and is made from iron ore fines of high grade. Pellets are used as a feedstock for steel making (both sponge iron manufacturing and in blast furnace). It seems CGSIMA considers pellets as a mined material just like iron ore. One can easily check the process by reviewing the operation of a pellet plant. If our grievances aren’t addressed we’ll have no other option but to shut down the production. Pellet producers are huge buyers for fines (being produced by the Commercial miners). Closure of pellet plants will have ripple & adverse effects on the Mining Industry and the whole economy on a macro level. Underutilization of iron ore fines will lead to huge stockpiles at pit head of mines, leading to increase in pollution load as well. Proper utilization of pellets also reduces the expenditure on importing coking coal. We all run a sophisticated industrial operation that is governed by Indian laws made for regulating the manufacturing industry. We are not violating any law by exporting pellets.”

CSSMA also stated on the comments made by CGSIMA that, “CGSIMA has made represented that there should be ban on the export of Pellets unless it’s by KIOCL (Kudremukh Iron Ore Company Limited). They claimed that the expansion of Sponge Iron capacities is either not possible or will be very limited in future due to a shortage of raw material. However, we have quantifiable data that’ll prove that CGSIMA claims are incorrect. Any ban or imposition of export duty on pellets, which are value-added and eco-friendly will be a retrograde step, and against the Make in India vision of the Hon’ble Prime Minister. It will further harm the foreign exchange, the extensive investment already undertaken by the industries, and the livelihood of those employed.”

The CSSMA-Chhattisgarh Sponge and Steel Manufacturers Association has presented detailed graphs, figures, and annexed legal opinions of esteemed advocates to support their case. Those opinions clearly states that Iron Ore Pellets can be exported without any regulation freely from India, and customs duty need not be levied on it. Past and outraged members of CGSIMA who strongly condemn the body’s motivated and malicious claims are urging the Mines Ministry to take necessary action against CGSIMA association.

Some more details for reference-

The data below provides validated information Iron Ore and Pellet and that it is surplus in the state of Chhattisgarh, and not otherwise as allegedly claimed by CGSIMA in its representation to the ministry at various levels:

SURPLUS QUANTITY OF PELLET & IRON ORE LUMP

Chattisgarh (Lump Production)

FY20-21

FY21-22

FY22-23

NMDC

28

38

39

Shri Bajrang Power and Ispat Limited

1.0

1.0

1.0

Jayaswal Neco Industries Ltd

1.0

1.0

1.0

Sarda Energy and Minerals Ltd

0.6

0.6

0.6

Godawari Power and Ispat Limited

1.8

2.3

2.3

Total of above Companies

32.4

42.9

43.9

Lump ratio

33%

33%

33%

Lump Production

10.8

14.3

14.6

Source: NMDC PPT Steelmint conference & market sources

Pellet Production

9.4

9.4

9.4

Pellet Produced at 85% utilization

7.99

7.99

7.99

Total Iron Ore Lump and Pellet Production

18.8

22.3

22.6

Sponge Iron Production

9.7

9.7

9.7

Iron ore Lump / Pellet required for SI Production with an average conversion factor of 1.7 time

16.49

16.49

16.49

Surplus Iron Ore / Pellet when Pellet is at 85% Capacity

2.3

5.8

6.1

Surplus Iron Ore / Pellet when Pellet is at 100% Capacity

3.7

7.2

7.5

Total
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