Jajpur: Iron ore prices in the state have skyrocketed after the state government permitted firms from outside to buy minerals from Daitari mines, a report said.
The state government’s move has impacted the industrial firms in Kalingnagar Industrial Complex in the district. The price per tonne of iron ore was Rs 4,500 in the e-auction held December 2, 2020. However, the base price per tonne of iron ore went up to Rs 6,000 in the e-auction held February 1, 2021.
Observers attributed the sharp rise in price of iron ore to the participation of outside firms in the e-auction which pushed the per tonne price by Rs 7,050.
On the other hand, industrial firms are reeling from severe loss as the prices of manufactured pig and sponge iron products are falling day by day. Meanwhile, 50 per cent of the firms in Kalinganagar have shut down their plants.
Observers apprehend that the sharp rise in iron ore prices may soon lead to closure of the rest of the plants and result in heavy revenue loss for the state government if the latter does not desist from increasing the prices at the behest of outside firms.
This will also result in heavy financial loss for financial institutions like banks and in job loss for scores of employees and workers of these plants, said PL Kandoi, president of Kalinganagar Industries Association (KIA).
Expressing serious concern, KIA recently submitted a memorandum to the managing director of Odisha Mining Corporation (OMC). In the memorandum, KIA members have demanded to scrap the last e-auction process and reduce the price of iron ores by calling for fresh e-auction.
Reports said over 25, 000 labourers working in various plants in Kalinganagar have lost their jobs over last five years. The termination of regular employees from service is equally grave and has touched around 3000.
The dismissal of regular employees and casual workers is attributed as one of the main reason behind the financial and social instability in the region.
The astounding rise in the price of iron ore has accentuated the problem when industrial firms in the country are going through the economic meltdown and Covid-19 pandemic. The sharp decline in profit margin has become a cause of concern for the industrial firms and changed the industrial scenario in Kalinganagar.
Firms like Tata Steel, Jindal Stainless Steel and Visa Steel are making all out efforts to overcome this problem while their counterparts like Nilachala Ispat Nigam Ltd, JJ Ispat and Mesco Steel have shut down their shops.
Many steel and sponge ironbased firms have established their firm in the state over last few years. However, the sharp rise in iron price has hit them hard and forced them to take a relook at their future.