Sponge iron makers in the state who are battling raw material crunch and finding iron ore prices unaffordable want Odisha Mining Corporation (OMC), the state controlled miner, to abandon auction based method of price determination.
"OMC should abandon the present auction based method of price determination and bring down the prices of its iron ore. The corporation should also dispense with the system of empanelment and its raw material may be made available to all the state based industries only”, said P L Mohanty, chairman, Odisha Sponge Iron Manufacturers' Association (OSIMA).
"Prices of iron ore fixed by the mine owners is directly based on prices fixed by OMC and now that OMC has small quantities to offer in its price discovery auctions, the bids are high. The government should consider pro-active steps and not initiate restrictive measures that would lead to litigation and stagnation which would be in no one's interest”, said he.
Stating that present iron ore prices are a result of constant mismatch of demand and supply, Mohanty said the present requirement of state based industries without captive sources is 15 million tonnes and this can be easily met by OMC alone given the deposits it holds.
OSIMA has submitted a memorandum to Prasanna Acharya, state finance minister and chairman of the inter ministerial committee formed by the state government to formulate a long-term policy for supply of ore to local industries.
The association has suggested OMC to aggressively go for increasing its production of iron ore as a glut in the market will automatically bring down prices. OSIMA has also demanded that all mine owners should mandatorily sell a portion of their produce to the state based industries. Moreover, all units who can technically use fines be allowed to lift iron ore fines.
As a measure for utilising iron ore fines, government should discourage its export and actively consider promoting pelletisation units for captive use. In this regard, allocations of fines from OMC and other mine owners on long-term basis to group of members interested to set up pelletization plant for captive use be encouraged, OSIMA suggested.
OSIMA has 108 members of which 86 do not have any captive source for iron ore.
"We have always been realistic in our suggestions. Coal price ruling at an all time high and the recent crisis in the state in the iron ore mining industry has resulted in production touching all-time low resulting in the sky rocketing of iron ore prices and consequently sounding the death knell of many a sponge iron industry in Odisha”, OSIMA stated in its memorandum.
