SAIL’s raw material division, headquartered in Kolkata, runs 15 mines including iron ore mines, flux mines and coal mines.
West Bengal finance, planning and programme monitoring minister Amit Mitra has alleged that Steel Authority of India Ltd’s (SAIL) Durgapur plant and the Burnpur IISCO steel unit are being stripped of assets like iron ore mines, as part of a plan by the Union steel ministry to eventually sell them off.
“I am deeply apprehensive that these two massive plants in Bengal would either be asset stripped or be sold off in the name of disinvestment, having crippled them through the current policy shift,” Mitra wrote in a letter to Union steel minister Dharmemdra Pradhan.
A SAIL spokesperson, however, said he didn’t have any knowledge of the ministry’s alleged move. SAIL’s raw material division, headquartered in Kolkata, runs 15 mines including iron ore mines, flux mines and coal mines. The eight iron ore mines under the division are spread across Orissa and Jharkhand. The two flux mines are in Jharkhand and Madhya Pradesh each and the remaining (coking) coal mines are in the ECL spread across Jharkhand and West Bengal.
These mines are believed to be entirely allocated to Rourkela and Bokaro Steel plants, as per the plan. The “Odisha mines will be allocated to the Rourkela and Jharkhand mines will be allocated to Bokaro”, Mitra said in his letter, adding that this would leave the two integrated steel plants of Durgapur and Burnpur at the mercy of Rourkela and Bokaro Steel plants for sourcing raw materials. Or the Bengal plants may have to procure raw materials from the open market.
Prices of iron ore fines have skyrocketed to a level of Rs 9,500 per tonne in the open market, whereas SAIL’s raw material division supplied it to Durgapur and Burnpur at Rs 650 a tonne. “By throwing Durapur and Burnpur into the open market, these plants would be rendered uncompetitive. And over time, these plants would become inefficient, unprofitable and unviable,” Mitra wrote adding these two plants have posted a combined profit of Rs 1,486 crore in FY21.
The steel plants at Durgapur and Burnpur have a capacity to produce 2.12 milion tonne per annum and 4.26 lakh tonne per annum of saleable steel. With a workers’ strength of 14,400, these plants would soon be in a “dire state” and the employees in the raw material division would also be destabilised in the midst of the pandemic, Mitra wrote.