Faced with soaring prices of iron ore and its shortage in Odisha, several industry associations have urged the government to reactivate the pre-emption right of the commodity produced in the state to ensure adequate availability of the raw material.
The scarcity and the surge in prices are mainly on account of interstate exports of iron ore, the Confederation of Indian Industry said.
Several other industry bodies like the Pellet Manufacturers' Association of India (PMAI) and the Orissa Sponge Iron Manufacturers Association (OSIMA) have sought the intervention of the state government to overcome the crisis.
"In recent times, the state-based iron and steel industry has been facing huge challenges due to low production of iron ore, rampant interstate dispatches, and thus the exponential increase in prices," CII said in a letter to the principal secretary of the department of steel and mines.
The companies, which have made huge investments in the value-added industries by setting of plants in the hinterland areas are facing severe raw material crunch, it said.
"There is an urgent need to reactivate pre-emption rights of iron ore for state-based end-use plants to ensure sustainable supply of usable ore," the industry body said.
Citing the policy by the Karnataka government, where there is a total ban on export of ore outside the state, the industry body stated that similar steps would enable such industries to sustain, amid the COVID-19 pandemic.