Iron ore shortage hits Tata Steel plant

December 29, 2014 05:44 pm | Updated September 23, 2017 12:51 pm IST - Mumbai

The curtailing of production due to suspension of operations at one of Tata Steel’s blast furnaces in Jamshedpur for more than a month due to shortage of iron ore during the current quarter forced the company to operate below capacity during the period.

Tata Steel’s operation in Jamshedpur is locationally designed to operate from its iron ore mines in the vicinity of its operations, a statement from the company said. However, the unit was impacted by the shortage arising from the suspension of mining operations in Jharkhand and four mines in Odisha.

The company said local sources of iron ore in the region had been deeply impacted as most merchant mining operations in the country are currently suspended.

To ensure continuity of its operations, the company had to procure iron ore from domestic and imported sources for Jamshedpur operations “despite severe logistics challenges at the port and the availability of railways capacity.”

For the current quarter, mining operations in the Naomundi Iron ore mine in Jharkhand was suspended for the entire period and four mines in, including the Joda iron ore mine, were suspended for a month, the statement said.

“All the above factors have impacted the stability of operations, cost structure and profitability of the company during this quarter,” Tata Steel said.

However, following the resumption of iron ore and manganese mining in Odisha on December 15, 2014, the steel operations of the company have been ramped up. Tata Steel expects the Odisha government to take a decision on the renewal applications for the Khondbond iron

mine and three manganese mines by middle of February 2015.

The mining operations in these mines and project for expansion of mining capacity in Khondbond have been suspended since May 2014.

The Sukinda Chromite mines in Odisha, which have been closed since May 2014, and processing operations in the ferro alloys division at Bamnipal were closed since August 2014. These are expected to resume soon.

“The company continues to be fully engaged with the Government of India and the state governments of Odisha and Jharkhand to pursue the renewal of the leases of the mines, and is also pursuing appropriate legal recourse in the matter,” it said.

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