Jajpur: An e-auction of iron ore lump by Odisha Mining Coproration (OMC) held July 31 failed due to the high floor price fixed by the state-owned mining body for Daitari calibrated lumpy ore (CLO), a report said.
As a result, there was no bidding for the entire quantity of 90,000 tonnes of iron ore lump.
It is alleged that OMC arbitrarily fixed the floor price at Rs 10,511 per MT knowing well that this is an unviable price for the end-user industries due to the negative factors of Daitari iron ore, such as high phosphate content and high under size.
Reports said that due to this, Daitari iron ore has limited buyers compared to other OMC mines. More than 50 per cent of lifting from Daitari mines is done by Kalinganagar-based industrial firms and nearby industries.
Meanwhile, most of the units have shut shop due to such arbitrary pricing by OMC. Members of Kalinganagar Industries Association (KNIA) and All Odisha Steel Federation (AOSF) had suggested OMC to fix the floor price at Rs 7,000 per MT.
This would have been a viable price for the Kalinganagar-based industries, but the suggestions fell on deaf ears. Now it is clear that even standalone industries had represented to OMC to reduce the floor price.
During the last auction held June 2, the floor price was fixed at Rs 11,550 per MT due to bidding by Jindal Steel and Power Ltd (JSPL) and Rungta, who have their own captive mines.
Lifting from Daitari mines in June was only 63,641 MT and in July it was even less at 23,884 MT as against the usual lifting of 2.5 lakh tonnes per month.
This has resulted into a sharp increase in OMC’s stock of iron ore at Daitari mines to 411,000 MT of CLO as on August 1. As a result, state exchequer and industries are suffering huge losses, primarily owing to drop in dispatch.
Most of the industries based at Kalinganagar having LTL with OMC could not lift their quota. Notably, companies like VISA Steel have already shut down its blast furnace.
DRI and KJ Ispat have also closed their sponge iron units in the area. Other companies like Mesco Steel, Maithan Ispat and Neelachal Ispat are closed since long due to the unreasonable price of Daitari iron ore, which is fixed by OMC.
There is already a fear among the workers as to whether the industries who have shut their units due to high prices of Daitari iron ore CLO from OMC shall pay wages to them or not.
It is learnt that already several contract workers have been retrenched by these industries.
It is high time that OMC reduces the price of iron ore CLO from Daitari and enable the Kalinganagar-based industries to survive, as the plants without captive mines cannot afford to continue operation in the face of such huge losses, reports added.
PNN