NMDC to soon ramp up prodn in Bellary to 1 MT/month: Govt

Amid shortage of iron ore for the steel industry in southern India, the government today said the situation will stabilise in a month, as the country's top miner NMDC is in the process of ramping up its production in Karnataka's Bellary to 1 million tonne per month.

"I think we should be able to stabilise things very soon... In a month's time things will stabilise for steel the sector," Steel Secretary P K Misra told reporters here on the sidelines of a CII conference.

He added, "They (NMDC) will ramp up their production capacity to 1 million tonne. They are very confident and I think that in a month or so they will be able to ramp it up".

The steel and allied industry in southern states are reeling under severe shortages of iron ore, a vital raw material for production.

The issue has come up, following a July 29 ban of the apex court on mining activities in Karnataka's Bellary due to environmental degradation of the area.

However, this led to a severe shortage of iron ore in the southern India as Bellary accounts for about 80% of Karnataka's total production at about 40 million tonne per annum.

The industry has been arguing that the partial relief provided by the apex court on August 5, which allowed only state-run NMDC to mine one million tonnes of ore per month (or 12 MT in a year), would not help as the demand is much more.

According to Bangalore Chamber of Industry and Commerce, iron ore demand of the steel and allied industry in Karnataka alone is 2.9 million tonne per month, while NMDC has been allowed to mine only 1 million tonne per month.

The chamber had also said that the state-run firm has been supplying only in the range of 21,000-22,000 tonnes per day against the estimated daily production of 33,500 tonnes, to fulfil the criteria of producing 1 million tonnes per month, as has been ordered by the apex court.

However, the Steel Secretary said that the NMDC has also started supplying from Chhattisgarh to meet the shortfall, while some industries are buying from Goa to run their plants.

"We are also supplying some ore from the Chhattisgarh area and some of the industries are also buying ore from Goa... In a month's time things will stabilise for Steel," Misra said.

Few days back, NMDC Chairman Rana Som had acknowledged that in August, production of iron ore from its mines in Bellary cannot be reached to the desired levels of 1 million tonne per month, as the apex court order came in the first week of the month.

He, however, had said that the company will achieve 1 million tonne' production level by the end of the month and from September onwards, the said quantity would be supplied.

"This month, the production (of iron ore) from Bellary may be little less than one million tonne as the apex court order came in first week of the month. But, it will surely be 1 MT from September onwards," Som had said, adding that current productions are about 30,000 tonnes per day.

NMDC has allocated supply of iron ore to 46 companies in Karnataka as per the industry types and long-term supply contracts, he had said.