Ferrosilicon industries face raw material shortage

Indian quartz is most sought after by ferrosilicon industries in Pasakha

All the ferrosilicon industries of Pasakha Industrial Estate nowadays are facing a shortage of Indian quartz, the primary raw material to produce ferrosilicon.

The shortage started from early March this year. The prime reason, according to the industries, is the closure of mines illegally operated in Bankura by the West Bengal government. All the ferrosilicon industries have been importing raw materials mostly from Bankura. Quartz from Bankura mines is cheap and of better quality.

Now, these industries have resorted to importing from other mines in Jharkhand, Meghalaya and Andhra Pradesh, which is expensive but of inferior quality compared to Bankura’s quartz.

Industries are also paying double the rate they used to pay while importing from Bankura. Due to multiple ports, costs to reach the materials from far away mines have escalated as the industries land up paying higher taxes and charges.

Also, the companies have to make double declarations at the customs office when importing from Meghalaya. First, they have to declare at Samdrup Jongkhar checkpoint and then they need to obtain transit declaration from the capital to route the materials from Indian roads to reach the plant in Pasakha. “The cost of procurement has escalated,” said Accounts Officer of Druk Ferro Alloys Limited, Giri Dhari Saha.

Ugyen Ferro Alloys Limited’s Commercial General Manager Manush Sharma said that with the cost of procuring quartz shooting up, ferrosilicon production industries are not in stable condition. “We can foresee negative impacts. The cost of production will increase as quartz is the main raw material. However, we have stocked up for some more months and are looking into exploring other sources.”

To avoid escalating transportation costs, Druk Ferro Alloys Limited, Ugyen Ferro and Alloys Limited and Druk Wang Alloys Limited imported 3,600MT of quartz collectively from Andhra Pradesh in a 51-wagon train once.

When the industries were procuring quartz from West Bengal, a MT would cost Nu 3,350 including transportation costs. But now, the cost has gone up to Nu 3,600 per MT if imported from Jharkhand and Nu 4,000 per MT if procured from Meghalaya. Due to increase in production costs, the finished product, ferrosilicon, has also turned dearer.

Bhutan Ferro Alloys Limited’s (BFAL) Senior General Manager (Purchase), Nakphey Wangchuk, said that since quartz is sourced from disturbed areas, the companies have to depend on the traders to fix the price. BFAL is, however, trying to explore other sources. “We are unable to produce enough ferrosilicon and we are also facing operational problems,” he said adding that the plant cannot produce quality finished product if Bhutanese quartz is used. However, currently every company has stocked up a reserve deposit of quartz for more than three months.

Ferrosilicon industries also use quartzite from Bhutanese mines. However, the use of these minerals results in more slag generation than ferrosilicon resulting in inferior quality product. Indian quartz is most sought after by ferrosilicon industries in Pasakha.

When the industries face raw material shortage, they resort to borrowing from each other’s stock to keep the plant operational. Ferrosilicon is sold at Nu 70,000 per MT in the Indian market.

Krishna Ghalley from Phuentsholing