Seven units with a 75 MVA capacity have sprung up using the cheaper Damodhar Valley Power (DVC) which is priced around 230 paise per kwh and are selling their high carbon ferro manganese and silico manganese at around Rs 1000 lower than other producers in different states. Apart from cheaper power, they can also draw supplies of coke from neighbouring steel plants likeDurgapur, IISCO and Bokaro which gives them the raw material advantage.

Two more units with a capacity of 35 MVA are coming up in West Bengal within the next two months, which will add another 5000 tonnes of monthly production, thus adding to the surplus in the country. Interesting thing is most of the units have been able to get finance from public financial institutions as theyare viable at least until the power rate is lower in West Bengal, than in other states and they can recoup their investments.

At present the installed capacity for manganese alloys is around 702,550 tonnes while the demand for the product is 340,000 tonnes. The total installed capacity in the industry is around 1.46 million tonnes against a demand of 551,000 tonnes, which includes an export demand of 172,500 tonnes. Capacity between the different alloys can be freely changed and therefore a huge reserve capacity for all ferro alloys has sprung up in the country.

Exports at present fetch Rs 500 crores a year and there is scope for larger exports, though the present world prices are abnormally low, and there is no hope of a quick increase. The power rate of DVC is not low enough to promote exports and it is only NTPC power rate from older power plants with average rate being less than 160 paise per unit which can make exports just viable.

Sandur Manganese and Iron Ores Ltd which was getting some 20 MW ofNTPC power at around 160 paise for some time could manage exports of ferro silicon and silico manganese but when the power rate was increased to 232 pais it preferred to close down its furnaces rather than run them and loose money.

In Karnataka, the other major ferro alloy unit VISL is also closed as the state power has gone upto 420 paise per kwh and the market prices of ferro silicon do not cover the power cost. But now VISL has been merged with SAIL and SAIL losses will increase while VISL is saved.

In nineties M.P was the destination of all ferro alloy producers and units sprang up with great rapidity there, with nearly 30 producing all the bulk alloys required. But today power is scarce in M.P. and costly too, and hardly two units are working while the rest are closed.

In Maharashtra Universal Ferro which has been closed for two years is trying to open, if NTPC power is available and the State electricity board (MSEB) also gives some concessions. The milch cows of the board like ferro alloys, steelare .......