Due to higher prices of domestic chromite ore, Jindal Stainless Limited (JSL) has decided to increase import of chrome ore for use at its one-million-tonne stainless steel plant at Kalinga Nagar, in Jajpur district.
“We have started importing limited quantity chrome ore from Oman as international prices are currently lower. There will be more imports in future as domestic prices are much higher at present,” said S S Virdi, Executive director and chief operating officer (COO) of JSL, Orissa on the sidelines of a seminar on “Stainless Steel Conference: Challenges and Opportunities” organized here.
The state-run Orissa Mining Corporation (OMC), which enjoys a monopoly in determining ore prices in the state, has raised chrome prices by more than 10 per cent for the Jan-Mar quarter. The prices of different grades of chrome ore now cost between Rs 11,000 and Rs 16,000 per tonne in Orissa, the largest producer in India.
Local consumers, especially stainless steel makers, said even though the chrome content in imported ores is less, they cost 40 per cent lower than Indian ores.
“At current exchanges rates, South and West African chrome ores are sold at 60 per cent of Indian prices. So we plan to use higher amount of imported ore with little amount of locally mined ores to maintain the minimum chrome content requirement,” Virdi said.
Top JSL officials criticised OMC policy of price determination formula saying that the prices are going up despite anti-export measures taken by the government.
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“We had come to the state only because of chrome ore and have set up our factory. But the approach adopted by the government for determining ore price is faulty and anti-industry,” said Ratan Jindal, vice chairman of JSL.
OMC determines ore prices every quarter by auctioning 10 per cent of its total salable quantity. Bulk users have complained that small consumers often bid aggressively during the auction process and push up the rates. The steel companies have even taken up the matter to the court.
“The Orissa High Court last month has admitted the plea of All Odisha Steel Federation regarding the fixing of ore prices by OMC and the hearing will take place this month. We hope to get some relief,” said Virdi.
JSL needs about 40,000 tonne chrome ore every month for its one-million-tonne a year steel plant, which uses metal scraps to produce stainless steel. The company aims to increase the capacity to 1.6 million tonne in a couple of years, informed Jindal.