JAJPUR: Pellet, sponge iron and steel industries in Odisha are on the verge of closure due to the non-reduction of floor price of iron ore by the State-run Odisha Mining Corporation (OMC), the industries’ body of Kalinga Nagar cluster said.
President of Kalinga Nagar Industries Association (KNIA) PL Kandoi said non-reduction of iron ore floor price to a viable level will result in closure of industries, loss of revenue to the State and retrenchment of thousands of direct and indirect employees.
E-auction for the iron ore is scheduled to be held this week. On May 22, the Union government imposed export tax of 15 per cent on steel and stainless steel products and 45 per cent on iron ore pellets. On iron ore, the export tax has been increased to 50 per cent. Due to this, the price of steel has fallen sharply by Rs 7,000 to Rs 10,000 per MT while that of sponge iron sharply reduced from Rs 36,000 to Rs 30,000 per MT.
The National Mineral Development Corporation (NMDC) too have reduced the prices of iron ore CLO (calibrated lumpy ore) and fines by Rs 2,000 per MT. However, the reduction of the floor price of iron ore CLO by OMC for the June e-auction is much less. Kalinga Nagar-based industries are likely to suffer the most as OMC has reduced the floor price of Daitari CLO by only Rs 550 per MT. Similarly, the floor price of Gandhamardhan CLO has been reduced by Rs 900 and Jiling/Guali by Rs 1,300 per MT, industry insiders said.OMC, which is the largest merchant mining company, has fixed the price of Daitari and Gandhamardhan iron ore CLO at `5,050 per MT despite poor market demand and diminishing product price, they added.
In Odisha, the recent iron ore CLO auction conducted on June 10 by JSW received a poor response as only 11,850 MT was booked against an offered quantity of 102,700 MT (approximately 11 per cent). The auction conducted by the Steel Authority of India (SAIL) on June 11 for selling iron ore CLO from its Odisha mines failed to attract any buyer as no response to the request for tender auction was received.
Kandoi said, “The NMDC has reduced the price of iron ore CLO by Rs 2,000 per MT in view of the fallen steel price. We demand the OMC should follow the NMDC for the survival of pellet, sponge iron and steel industries in the State.”