Reaping the benefits of “home advantage”, the chrome ore user industries from Odisha have laid their hands on the material at a price 9.6 per cent cheaper compared to their counterparts from outside the state in the first ever online sale of chrome ore by OMC.
“Domestic buyers were in an advantageous position compared to outside buyers as higher quantity of ore was reserved for them ensuring less competition. Hence, they could get the material at lower prices,” explained an official of OMC.
In the chrome ore e-auction of OMC, conducted recently, out of 77,000 tonne chrome ore offered for sale, 49,900 tonne was earmarked for user industries from the state.
The domestic buyers participating in the e-auction could get chrome ore with 54 per cent chrome content at 11,470 per tonne, which is 4.5 per cent lower than the selling price of Rs 12,003 per tonne fixed by the state-owned miner for the April-July period.
However, for high grade ore of Sukrungi mines, with fewer impurities, the highest bid was above the benchmark price of Rs 12,170 per tonne.
As against this, the outside-the-state bidders bought the chrome ore with 54 percent chrome content at Rs 12, 570 per tonne per tonne, which was also higher than the last-declared price of OMC for April-July.
The e-auction for chrome ore was conducted last week, after OMC scrapped its earlier attempt to sell the mineral through the online system in late June citing technical error in the process. The traders, on the otherhand, alleged that the resource company had canceled the earlier auction process due to “unenthusiastic” bid prices.
While stating that technical error in software coding was the main reason for scrapping the auction, OMC had admitted discrepancies in the bidding process.
“Some bidders quoted lower price for high grade ore while they bid higher for low grade material. If we would have gone ahead with this process, then it would have been difficult to explain the auditing agency why we sold high grade ore cheaper than low grade mineral,” the OMC official had said.
The state-run miner had gone for chrome ore e-auction for the first time to get better price realisation after it was forced to cut prices in April this year following poor market demand.
It has also gone for the online trading after traders and industry users complained about its monopoly in deciding mineral prices before the Competition Commission of India (CCI).
Chrome ore finds its usage primarily in stainless steel industries, apart from refractories. Many Odisha-based industries depend upon OMC supplies to run their units.
Nearly all of India’s chrome ore is produced in Odisha with OMC having control over one third of production. Few players such as Tata Steel, Indian Metal and Ferro alloys, Facor and Balasore Alloys have also their captive mines in the state.
