Jajpur: E-auction of iron ore by Odisha Mining Corporation (OMC), the largest state-owned merchant miner, conducted Thursday has failed miserably once again due to wrong policies and high floor price fixed by the OMC. It is apprehended that the failure of the e-auction may seriously affect the production of the industrial firms at Kalinganagar in Jajpur district which do not have their own captive mines.
As profits are declining the industrial firms are contemplating to stop making further investments for a brief period in their units, said sources. Many of them have already made announcements in this regard. This has sparked fear of closure of many industrial houses and led to panic over job loss. This is quite visible as the dismissal of employees is more than the appointments taking place in various plants in Kalinganagar Industrial Complex.
Industrial plants like Visa Steel, Ferrochrome, Rohit Ferrotech, KJ Ispat and others do not have their own captive mines. With the state government’s policy of ‘no mines without industries’ is not being applicable to Kalinganagar area, many industrial plants are dependent on OMC for raw materials. However, whimsical fixation of floor price by OMC has hit the plants and sparked fears of insolvency.
Sources said that the OMC conducted its auction, Thursday. A negligible quantity of only 0.150 million tonne of iron ore was sold out of total 1.364 million tonne put on auction.
Out of 0.746 million tonne of iron ore, only 0.016 million tonne was sold at minimum base price and 0.135 million tonne of iron ore CLO was sold out of 0.618 million tonne, all at base price without any premium.
This has been happening as the OMC is fixing the initial floor price as per the demands of the foreign companies. The OMC’s auction remains satisfactory when the foreign companies participate in the auction and purchase iron ore at a higher price.
However, most of the OMC’s e-auctions miserably fail when it expects that the foreign companies will participate in all the e-auctions and decides the floor price accordingly. This has severely hit the local companies that are dependent for iron ore and chromites on the state-owned OMC.
This proves that OMC is artificially keeping very high floor price and profiteering at the cost of pellet and sponge iron manufacturers in the state. The pellet plants and the sponge iron plants have started shutting down due to unviable prices of iron ore, office bearers of Kalinganagar Industries Association (KNIA) alleged.
Industry bodies in Odisha have been requesting OMC as well as the state government to reduce the floor price of iron ore but their pleas have fallen to deaf ears and are yet to be addressed. Moreover, common labourers and employees of various plants dependent on these industrial plants for their livelihood are passing their days with fear of loss of livelihood. They have again demanded the state government to intervene and address this issue which has been plaguing the survival of their companies.
As the iron ore auction has failed, OMC should reduce the floor price and should re-auction immediately or else more plants may shut in the state leading to further job losses.