Iron ore output at three mines run by India's NMDC Ltd (NMDC.BO) 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 seven to 10 days to restore power supplies, Jai Prakash, the state-run miner's spokesman, said.
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 (5401.T) and JFE Steel Corp (5411.T) would be among those affected, another official at the firm, who did not wish to be named, told Reuters.
Prakash said NMDC may lose 100-120 million rupees ($2.3-2.8 million) due to the stoppages, the second in the past year, at the mines in Bailadila iron ore complex, 300 km (190 miles) south of Raipur, the capital of the Chhattisgarh state.
The three mines produce about 23 million tonnes of iron ore a year, he said.
Chhattisgarh 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, including hundreds of policemen, 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, Ispat Industries (ISPT.BO) as well as overseas companies.
India exports about 90 million tonnes 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 300 rupees per tonne on higher grades and 50 rupees 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 1 billion rupees, 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. ($1 = 42.92 rupees)
(Editing by Mark Williams)
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