ET reported that Orissa government will soon set up an expert committee to frame a pricing policy on minerals to enable local steel makers compete with other steel companies.
The proposed policy will take into account the international prices, London Metal Exchange prices and price at which National Mineral Development Corporation is selling iron ore.
Mr Prafulla Chandra Ghadai, finance minister and chairman of the inter ministerial group on price fixation on raw materials said that "We need to ensure a level playing field to local industries which are now forced to procure raw materials at exorbitant price. We will soon set up a committee of experts to advise Orissa government on a new pricing policy for minerals to ensure that industries get their requirement at reasonable rate."
He said that "We will have a pricing policy for raw materials so that no industry is forced to pay more for their needs. We will ensure that the local industries are not forced to procure their required raw material at higher price."
Mr Ghadai said that "Besides, we will look to the recommendations of the expert committee. The cost of production will be factored in while determining ore prices and the state government will ensure that our ore prices are in sync with global market trends."
The finance minister admitted that there is no proper raw material linkage as well as pricing though the state government had signed MoU with about 80 industries, including 50 steel manufacturers.
The steel units in Orissa is in a crisis like never before with almost all plants closed. Even the Promoters have announced to hand over the keys of their plants to the authorities for good.
Mr PL Kandoi president of All Odisha Steel Federation said that "Our steel units are competing with TATA Steel and SAIL, who have captive mines and their cost of iron ore, chrome ore, dolomite, power, water etc. are at very low levels. We are, however, forced to pay exorbitant price for all kinds of minerals. This disparity is the root cause for the historic decline of the growth in the steel sector. We have been appealing the state government to make iron and chrome ore available at workable rates."
Mr Kandoi regretted that the state government did not keep its commitment given in the MoU with these units to provide captive mines. He added that "The officials know everything in detail, but are just buying time, to enrich the mine owners. It was once decided to cap the selling rate of iron and chrome ore with 100% profit on cost to the mine owners and 100% royalty to the Government. Once the mine owners went to the court, the government kept quiet."
The steel manufacturers had been alleging the state owned Orissa Mining Corporation supplying of minerals at exorbitant prices apparently hand in glove with the private mine owners. In fact, during the review meeting, the minister asked the state agency to step up production of iron ore and asked to open up Daitari to cater to the demands of steel units based at Kalinga Nagar.
The committee has sought some information relating to mineral output of OMC and overall raw material requirement of existing and upcoming industries in the state. The information is expected to be made available to the committee in the next 15 days.
(Sourced from ET)
