BS reported that Essar Steel's request for an additional 3.5 million tonne per annum of iron ore has been declined by National Marine Dredging Company.
As per report, NMDC has turned a deaf ear to the request as Essar has not been able to lift the earmarked quantity for the current fiscal so far and therefore finds no logic in supplying it more. The mineral allocation to Essar's SEZ unit will be considered deemed exports, which is not permissible under the existing long term agreement it has with the company.
However, turning down the request, NMDC said that the off take of iron ore earmarked for Essar Steel in the current fiscal has declined to 4.58 million tonne so far against the target of 6.95 million tonne, resulting in piling up of the mineral. At the current rate of off take, Essar may not be able to lift more than 5.7 million tonne, the miner said while giving the rationale behind not supplying additional quantity to Essar.
Essar group had sought the PM's intervention for the allocation of 3.5 million tonne per annum of iron ore, reserved by NMDC for exports, to feed Essar Steel's 4 million tonne per annum SEZ steel complex coming up in Hajira, Gujarat in 2009 at a cost of about INR 9,000 crore. While seeking more supply of iron ore from NMDC, Essar had expressed its willingness to compensate the PSU at par with the FoB value being sought for export of iron ore to Japanese and South Korean steel mills.
Source: Business Standard