Mumbai: Iron ore output at three mines run by state-run miner NMDC Ltd has stopped after Maoist rebels blew up power transmission towers, hitting supplies to local and Japanese buyers, company officials said on Monday.
“We have been told by government officials it would take 7-10 days to restore power supplies,” said company spokesman Jai Prakash. But he added NMDC would run out of supplies much before that: “We do not have much stocks. It may last for two to three days.”
Japanese steel makers Nippon Steel Corp. and JFE Steel Corp. would be among those affected, said another official at the firm, who did not wish to be named.
Prakash said NMDC may lose Rs10-12 crore due to the stoppages, the second in the past year, at the mines in Bailadila iron ore complex, 300km south of Raipur, the capital of Chhattisgarh state. The three mines produce about 23 million tonnes, or mt, of iron ore a year, he said.
Chattisgarh is a stronghold of Maoist rebels who operate across parts of at least 13 Indian states and say they are fighting for the rights of poor farmers and landless labourers.
The conflict between the rebels, who operate from remote hideouts in rough terrain, and security forces has killed thousands of people.
Hundreds of policemen have lost their lives while fighting the rebels over the past three decades.
NMDC is a leading miner and supplies Indian firms such as state-run steel maker Rashtriya Ispat Nigam Ltd, Essar Steel Ltd, Ispat Industries Ltd as well as overseas companies.
India exports about 90mt of iron ore, mainly to China. Most of the sales are done on spot basis, unlike other big suppliers who tie up long-term contracts.
In early 2007, the government imposed an export duty of Rs300 per tonne on higher grades and Rs50 on lower grades, to discourage exports and to conserve future supplies for domestic steelmakers, many of which are planning to expand.
In May last year, Maoists blew up transmission towers in the same area, forcing NMDC to shut several mines for 10 days. Losses amounted to about Rs100 crore, Prakash said.
The Maoists routinely call strikes, attack government property, and target local politicians.
Prime Minister Manmohan Singh has described the Maoist rebellion as the single biggest threat to India’s internal security and has asked states to establish specialized and dedicated forces needed to cripple the “virus”.