Raipur: Due to a significant increase in electricity rates, business owners have announced the indefinite closure of 150 mini steel plants in Chhattisgarh, effective Monday night. Industry insiders report that the soaring electricity costs have made it nearly impossible to continue operations, impacting around 200,000 people.
Mini steel plants in Chhattisgarh are crucial for producing raw materials from sponge iron. These factories convert sponge iron into billets, which are then used to manufacture products such as TMT bars, rods, and steel bars. The steel industry operates in three stages in the state: initial production of sponge iron, followed by billet manufacturing at mini steel plants, and finally, the creation of finished iron products like rods.
The closure of these plants is expected to severely impact about 200,000 employees directly engaged in the industry. Additionally, approximately 150,000 individuals working in transportation and related services will also be affected. Workers earning between 300 and 400 rupees daily face potential hardships in meeting their basic needs.
The steel industry contributes around 10,000 crore rupees in GST and approximately 5,000 crore rupees in royalties to the state annually. Directly, 500,000 people are involved in the industry, with another 700,000 engaged in its marketing and ancillary activities.
Anil Nachrani, President of the Chhattisgarh Sponge Iron Manufacturers Association, stated that despite multiple attempts to secure relief, no resolution has been achieved. Nachrani emphasized that such a shutdown is unprecedented in the past 20 years.
The Managing Director of Chhattisgarh State Power Distribution Company Limited has also been informed about the escalating electricity rates, but no effective solution has been provided.
The mini steel plants are grappling with a 25% increase in electricity rates, which has significantly raised production costs. As these plants are among the highest electricity consumers in the steel industry, the surge in rates has rendered it financially unviable to maintain operations.
Decision to Close Plants
A meeting held late Monday evening at a Raipur hotel on Jail Road concluded with the decision to keep the plants closed until government relief is provided. The meeting was attended by officials from the organization across the state.
The shutdown is likely to affect not only the 200,000 workers and employees but also the general public, as products from these plants are integral to construction and housing. The closure may lead to higher product prices and disrupt market supply.
Chhattisgarh, the second-largest steel producer in India after Odisha, houses over 850 steel plants. The state consumes 15% of the steel produced locally, while the remaining 85% is sold outside the state.
State Industries Minister Lakhan Lal Devangan has informed the media that a letter has been sent to the Chief Minister regarding the business owners' demands. The Chief Minister will make the final decision on the matter.
