“Discriminatory” policy forces NBFAL to shut down its Orissa plant

By Akshaya Kumar Sahoo

Bhubaneswar, July 12: Even as the Orissa government tries to woo more and more mineral based industries in the state by promising captive mines lease to them, India’s largest ferro alloy producers, Nava Bharat Ferro Alloys Limited (NBFAL), has shut down its one lakh-tonne ferro alloys plant near Meramundali in the undivided Dhenkanal district.The reason for the closure, according to sources, is the company's lack of access to chrome ore, abundantly available in Orissa. However, the company has not yet laid off some 350 direct workers, but anytime could terminate the services of its employees on the roll, the sources added.Some 1000 contract workers already have lost their livelihood.The NBFAL had set up the Meramundali unit, nearly 150 kilometer from here, in 1995 at a cost of Rs 200 crore and so far sustained an accumulated loss of Rs 70 crore as it had to source chromites from the market while its competitors, like, Facor, Imfa, Iccl, Ispat Alloys, Jindal Steel Limited, Tata Steel were sitting pretty with captive mines to feed their ferro/charge chrome plants in the state and elsewhere in the country.Ironically, the NBFAL is the only ferro alloy unit in the state without a single captive mine for the last six years. The state government has been following a policy to give priority to lease out mines to the value added industries to meet their 50 per cent requirement, but the continuing discrimination to the NBFAL in the allotment of mining lease has baffled experts.NBFAL almost had the mine for its captive consumption in mid-2001.However, some strange problems dogged it from the execution of the mining lease in its favour. The state government, way back on 28 January 1999, had recommended the central government to grant NBFAL an area of 84 hectares to meet its 50 per cent captive requirement for fifty years in line with the historic Supreme Court verdict for granting captive chromites mining lease to ferro alloy producers. The union mining ministry had also endorsed the state government's recommendations on 9 July 2001. The company had accepted all the terms and conditions for the lease deed and accordingly deposited a treasury challan on 18 August 2001 at Jajpur Road.But the leading ferro alloy producer got broiled in the litany of litigations and politicking. Interestingly, all along, an Orissa based industrial house which has considerable influence in the ruling Biju Janata Dal headed by chief minister Navin Patnaik, had tried to block the lease to NBFAL through litigations, bureaucratic manipulations and political pressures, documents reveal.Meanwhile, Dhenknal Sadar MLA Sudhir Kumar Samal has written a letter to chief minister Navin Patnaik urging him to intervene and stop the discriminatory treatment to the industry.“The state government should immediately put an end to the discriminatory treatment to this industry and a lease deed may be executed immediately in line with the policy already adopted for similar industries in the state,” Mr Samal has said in the letter.