Iron and steel industries in the State are dependent on supply of iron ore from the Government-run Odisha Mining Corporation (OMC), which is now the State’s largest merchant mining company.
However, the OMC seems to be strangling the industries by fixing irrationally high floor price for ore during e-auction which is totally unviable for industries. The last three e-auctions conducted by OMC for iron ore fines and calibrated lumpy ore (CLO) have failed due to arbitrary and very high floor price being fixed by OMC without any logic. In the case of Daitari mines, there was a total failure by OMC as there was zero participation and the entire cargo remained unsold. The entire quantity of 96,000 metric tonne(MT) of iron ore fines and 90,000 MT of CLO from Daitari mines remained unsold as a result of high floor price fixed by OMC.
Most of the steel units in Kalinga Nagar Industrial Complex are closed or on the verge of closure due to high pricing by OMC, said sources.
The Kalinga Nagar Industries Association (KNIA), All Odisha Steel Federation (AOSF) and several other industry bodies have suggested OMC to reduce the floor price of CLO to Rs 5,000 per MT and iron ore fines to Rs 3,500 per MT so that these units are viable. The international price of iron ore has collapsed by over Rs 6,000/- per MT (or USD 80 per MT). The total despatches of OMC have dropped from 21 lakh MT in June to only 11 lakh MT in July and 9 lakh MT in August which is less than 50% of its capacity. The lifting from Daitari mines in July was only 23,884 MT and in August it was only 20,000 MT as against normal lifting of 2.5 lakh tonnes per month. This has resulted into a sharp increase in OMC’s stock of iron ore fines and CLO at various mines including Daitari and also leading into a huge loss to State exchequer due to drop in despatch. Several companies like M/s Mesco Steel, Maithan Ispat and Neelachal Ispat Nigam Limited, Adhunik, MSP, Concast etc are already closed since long due to unreasonable pricing of iron ore. It is learnt that thousands of contract workers have already been retrenched by these industries.
The livelihood of workers in the mines including truck drivers, helpers and workers etc is also at a stake. "The Govt of Odisha needs to intervene immediately to revive the situation. It is high time that OMC reduces the price of CLO and ore fines and allow Odisha based industries to survive during these difficult times," said a head of an industry in Kalinga Nagar area.
