Stemcor may cut pellet production at Odisha

British steel producer and trader Stemcor may cut iron ore pellet production at its Odisha plant due to weak local demand and the recently imposed tax on iron exports from India.

The government imposed a 5 percent duty on the export of iron ore pellets at the end of last month, taking another step in conserving raw materials for domestic metallurgists, which reduced shipments to China. Manufacturers are trying to pressure the government to stop the decision, as local demand is also weak.

The Stemcor power generator, which was commissioned last year and is slowly increasing in volume, currently produces only 50 percent of its capacity and is capable of producing 4 million tonnes of pellets per year, is now considering options to cut production.

"If the government does not lift the export duty and there is no domestic demand, then not only our pellet plant, but all trade enterprises will be forced to stop production," said Stemcor Managing Director N.D. Rao who is also a member of the Pellet Manufacturers Association of India.

The export duty will also affect the sale of Stemcor's Indian assets, which are required to repay some of its loans. Stemcor, a private company controlled by members of the Oppenheimer family, is raising money after failing to pay off $ 850 million in debt last May. Under an agreement with creditors, it extended the agreement through the end of February to allow it to restructure $ 1.25 billion in debt.