Iron ore mine owners take a break, as demand dips
The global meltdown has adversely affected iron ore production in West Singhbhum, where lie 30 per cent of the nation’s iron-ore reserves.business Updated: Nov 02, 2008 20:27 IST
The global meltdown has adversely affected iron ore production in West Singhbhum, where lie 30 per cent of the nation’s iron-ore reserves. While the production at several mines has already stopped due to demand slump, other mine owners are also considering to shut shop shortly.
Sources said that big players like Sai Sponge Iron at Jhinkpani, SR Rungta Group, Shah Mines and Minerals are running their units despite losses. “Decrease in demand for iron ore, fall in steel prices and high transporting charges are the primary reasons for the slump in the industry. As of date production has reduced by 25 per cent,” said an entrepreneur.
Sai Sponge Iron used to produce 150 tonnes to 180 tonnes per day. This has reduced drastically due to the dip in steel prices. “The company, however, is continuing production despite facing losses to the tune of Rs 5,000 for producing a tonne of sponge iron. The management has cautioned that if the prevailing condition persisted for long, they would have to ask the 200-odd workers to go on leave,” sources said.
Mukund Rungta, director, SR Rungta Group said that they have not assessed the losses yet. “Our company is following cost cutting measures to meet the loss. We have no plans to remove workers in coming days. The company is taking the crisis as a business trend and we would overcome it shortly,” he said.
Raj Kumar Shah of Shah Mines and Minerals is also facing a similar problem. The production in his firm is down by 25 per cent. “We know we cannot overcome the crisis within a couple of days. A delegation of Federation of Indian Mines, Minerals and Industries is in close contact with the Union government to control the crisis,” he said.