MPT coal import stoppage hits local consuming industries
With the Goa State Pollution Control Board (GSPCB) yet to give its consent to Mormugao Port Trust (MPT) for operating berth 10 and 11, the scenario looks bleak for coal consuming industries in the state.
Worst affected is the local sponge iron industry and the smaller foundries for which the GSPCB decision to stop functioning of the berths is a “double blow” coming on the top of another key raw material shortage, viz iron ore.
Most units when contacted said that they will have to “stop production” or “take enforced shut downs” since their entire requirements of coal is imported through MPT. Further they will also have to lay off employees on account of plant closures.
Although few of the consuming companies, are trying to make alternative arrangements by importing coal from Mangalore port and transporting it by road to Goa, the arrangement they said is not economical and cannot be sustained even for “short period of time” because of huge freight costs.
Speaking to the Navhind Times, Mr Manish Goel, director, Goa Sponge Iron, said that the core reason why the company as well as several other producers decided to “locate its plant in Goa” was because of “proximity to port.” But without this basic advantage, Mr Goel said, “the entire foundation of the industry has shifted.”
Pointing out to logistic difficulties in using the Mangalore port for imports and bringing to the plant by truck, he said the freight cost is ` 700 per tonne, which combined with higher iron ore prices on account of mining ban, has resulted in higher cost of production by ` 4,000 per tonne.
Another sponge iron producer, Mr Sunil Garg, Ambey Mettalic said that at present coal stocks in the factory will last for December production, but beyond that “plant closure looks likely.” Mr Garg added that his unit contributes ` 20 lakh a month by way of VAT and also provides employment to locals.
Several sponge iron producers said that they should be permitted to import coal and make own arrangements for lifting, since “GPSCB has not found them polluting the environment when it asked them to clear stock pile from the berth.”
According to officials in MPT, there are five large sponge iron units using berth 10 and 11, as well as Goa Carbon Ltd. However, the sponge iron industry imports non-coking coal from South Africa or Indonesia.
The other major importer of coking coal in Goa, officials pointed out was Sesa Goa Ltd. But they were not affected by the closure of the berths because they import via transhipper’s and transport it through “own barges” to the pig iron plant.
Meanwhile MPT officials said that permission to lift coal stocks lying in berth 10 and 11, that was earlier fixed at November 5 has now been extended to December 3, 2012. [NT]