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Steel industries in the state lifted 59.2 per cent of the iron ore allocated by state controlled miner Odisha Mining Corporation (OMC) in the April-July period of tis fiscal.
OMC allocated 0.95 million tonne (mt) for 18 MoU (memorandum of understanding) signed steel units for the April-July period. These units actually lifted 0.56 mt in this period, according to a written statement in the state assembly by steel & mines minister Prafulla Mallick.
The ore allocated by OMC was despatched to steel units like Bhushan Steel Ltd, Bhushan Steel & Power Ltd, Visa Steel, OCL Iron & Steel Ltd, Maithan Ispat, Action Ispat & Power Ltd and Aarti Steels Ltd to name a few.
Many steel makers have shied away from auctions conducted by OMC due to its prohibitive floor prices. In the last auction by OMC, floor prices of lump ore and iron ore fines were pegged at Rs 2,600 and Rs 1,700 per tonne. The auctions had tepid response since the steel firms complained that prices were too high and were not in sync with the prevailing market prices. OMC had offered 120,000 tonne of iron ore lumps and 60,000 tonne of fines from its flagship Daitari mines.
OMC's inventory of iron ore lumps and fines has more than trebled from 57,641 tonne (in October 2014) to 171473 tonne by the end of May this year due to lukewarm response to auctions. Most steel companies in the state were running their plants without iron ore leases and hence, were dependent on OMC for iron ore supplies. But, steep ore prices have prompted these companies to cut capacities drastically. The steel units were operating at hardly one-third of their capacities. Pellet makers, also were in the same fate with a capacity utilisation of only 30-35 per cent.
The state government has inked memorandum of understanding (MoU) with 48 steel firms of which 32 have already commenced partial or full scale production. Steel firms had grounded investments of more than Rs 1.25 lakh crore on their projects in the state.
