JAJPUR: Steel industries of Kalinga Nagar in Jajpur district and other parts of the State are grappling with shortage of raw material owing to Odisha Mining Corporation’s arbitrary fixing of floor price of iron ore during e-auction.
The last e-auction of OMC, held on July 31 failed as no industry came forward to buy the lot of 90,000 tonne of Daitari calibrated lumpy ore (CLO) due to the prohibitive floor price of Rs 10,511 per tonne. Sources said the mining major had fixed the price despite being aware of the fact that it is unviable for most industries in Kalinga Nagar and others which do not have their captive mines for procuring raw materials.
“Due to negative factors, Daitari CLO has limited buyers compared to other OMC mines. More than 50 per cent ore lifted from Daitari mines is consumed by industries based in Kalinga Nagar and its nearby areas. Most of the units in the State have shut due to such arbitrary pricing of iron ore by OMC,” said plant head of a Kalinga Nagar based steel plant. The Kalinga Nagar Industries Association (KNIA) and All Odisha Steel Federation (AOSF) had suggested OMC to fix the floor price of iron ore at Rs 7,000 per tonne as it is viable price for the local units but OMC did not pay heed.
During the auction held on June 2 this year, the floor price was fixed at Rs 11, 550 per tonne. While only 63,641 tonne iron ore was lifted from Daitari mines in June, it went down to 23,884 tonne in July.
The impact of such pricing by OMC has resulted in shutdown of several plants. While VISA Steel has already shut down its blast furnace and DRI, KJ Ispat has closed its sponge iron unit.
Other companies like Mesco Steel, Maithan Ispat and Neelachal Ispat have already closed a long time back.