At a time when the industrial units operating in the Kalinga Nagar Industrial Complex (KNIC), the emerging steel hub in Orissa's Jajpur district, are grappling with steep hike in prices of iron ore and chrome ore, the state government has assured that raw materials would be made available to these industries at subsidized rates.
"The industrial units operating in the Kalinga Nagar region are suffering because of high prices of iron ore and chrome ore. A three-member committee consisting of the secretaries of the departments of steel & mines, industries and commerce & transport has been constituted to look into their problems. The state government will ensure that the raw materials would be made available to these industries at concessional rates”, Raghunath Mohanty, minister for industries and steel & mines said in the state assembly.
The committee is looking into into various issues raised by the units operating in the KNIC like steep prices of raw materials like iron ore and chromite, prohibitive costs of transportation of ores and unavailability of adequate raw materials to run the units.
The committee was constituted last month after Kalinga Nagar Industries Association (KNIA) had complained of problems like inadequate availability of raw materials, high ore prices and high cost of transportation of ores.
The association had pointed out that owing to the prohibitive prices of ore transportation, the units have become commercially unviable.
"Two out of 11 industrial units operating at the KNIC have already been shut and the remaining units are operating at 30-50 per cent capacity. To ensure that the units run their operations normally, iron ore pricing and logistics pricing have to be streamlined”, P L Kandoi, president of KNIA had said earlier.
KNIA had suggested that the Orissa Mining Corporation (OMC) can supply 50 per cent of the ore to these industries at this fixed price and offer the balance through the e-auction mode. OMC can work out a base price of the ore based on production cost and after providing for its own margin can derive the selling price, it had pointed out.
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Kandoi said, prices of iron ore in the Gandhamardhan sector have surged by 191 per cent while in the Daitari sector, there has been an upswing of 130 per cent in the ore prices in the past 12 months.
The price of iron ore (size 10-40 mm) of OMC for the third quarter of 2010-11, from Gandhamardhan is fixed at Rs 4155 per tonne and from Daitari, at Rs 4455 per tonne. The prices of ore from these two mines for the same period of 2009-10, were Rs 1426 per tonne and Rs 1944 per tonne respectively.