BHUBANESWAR: High pricing of iron ore for long-term linkage customers has been resented by steel and other end-use industries of the State. Industries sourcing iron ore via e-auctions organised by State-owned Odisha Mining Corporation (OMC) said the price determination for long-term linkage (LTL) customers is arbitrary and not based on actual cost.
Drawing the attention of Chief Secretary Asit Tripathy to the arbitrary pricing of iron and chrome ore, Kalinga Nagar Industries Association (KNIA) said “The procedure followed by OMC to determine iron ore price is not appropriate as it leaves no margin for end users.”
In a letter to Tripathy, a copy of which was submitted to Chief Minister Naveen Patnaik, president of KNIA PL Khandoi said the bid price (`2,800 per tonne) at e-auction on April 28 for Daitari iron ore (calibrated lump ore) is unaffordable for LTL buyers. No bidder participated for the high price in the bid.
Noting that survival of industries across the country is at stake due to the current Covid-19 lockdown, Kandoi said several steel plants at Kalinga Nagar in Jajpur district have already closed down due to various challenges faced by them.
With uncertainty everywhere, the situation is likely to worsen further due to poor market demand and diminishing product price, both in domestic and international makets.The steel industries in the State are reluctant to restart production in spite of Government relaxing norms for industrial activities. With no manufacturing activity, the industries are not lifting iron ore from OMC resulting in huge loss to the State exchequer, the letter said.
Though a request was made to OMC to reduce the base price of iron ore for LTL buyers to help industries survive through the economic crisis, a response from the State PSU is awaited.Pointing to the faulty method of price discovery, the state-based units have sought relief from the steep prices in the form of concession in pricing. “The floor price for iron ore should be fixed on cost plus basis as being done by OMC for bauxite and as the State Government has requested Centre to do for coal pricing,” the letter added.