Jajpur: The state government lost revenues worth Rs 10 crore as the e-auction of chrome ore floated by the Odisha Mining Corporation (OMC) failed to attract buyers due to wrong pricing, a report said.
Over 7,000 metric tonnes (MT) of chrome ore have remained unsold as no firm participated in the bid. It was alleged that no industrial firms participated in the bid due to arbitrary pricing of ore.
The failure of the e-auction has dealt a blow to the OMC. The failure of the e-auction has also shocked 14 industrial firms dependent on the OMC for chrome ore. Trade unions have alleged that over 30,000 workers and labourers will lose their livelihood if the problem persists.
Reports said OMC has fixed the floor price of chrome ore at 13.5 per cent of the market price of ferrochrome. Accordingly, the floor price of chromites should have been fixed at Rs 12,214 in the e-auction Monday.
However, OMC levied additional Rs 3070 on the floor price leading to price escalation. In the e-auction, the floor price of ore was fixed at 15,284 per MT following which not a single tonne of chrome was sold during the auction.
The mining body could manage to sell only 14,800 MT of ore out of 35,100 MT put out for sale during an auction held April 23, 2021.
Similarly, OMC failed to dispose of all the chrome ore during similar auctions held January 11, 2021, February 10, 2021 and March 15, 2021. It was alleged that the OMC arbitrarily fixes the floor price of chromite ores based on the advice of the consultancy firm KPMG.
Members of Kalinganagar Industries Association (KNIA) and industrial bodies alleged that the OMC has missed the opportunity to liquidate the stockpiles of ore due to a wrong formula and price set by the KPMG.
The mining corporation and the state exchequer have suffered huge losses due to lower off-take of chrome ore. They have requested the state-owned OMC to revise the formula as suggested by the Price Waterhouse Coopers (PWC).
The PWC had suggested fixing the floor price of chrome ores at Rs 13, 457 per tonne which is 12.65 per cent of market price of ferrochrome. However, the OMC had fixed the floor price at Rs 16, 527 in the bidding process April 23, this year.
It has also urged the OMC not to add additional royalty to the floor price. The floor price of the chrome ore is linked to ferrochrome price, said the industries’ body.
Notably, firms that do not have captive mines are dependent on OMC for chrome ore. However, it has become difficult for them to buy chrome ore from OMC at current prices. They apprehend that if the OMC does not reduce chrome price, it might lead to closure of their plants.
When contacted, PK Swain, regional officer of OMC, refused to comment on the issue stating that the auction is conducted by the sale committee.
PNN
