BS reported that to ensure availability of raw materials to the industries operating in the state at affordable rates, the Orissa government has reserved certain percentage of minerals produced by the state owned Orissa Mining Corporation for these units.
As per this decision, 70% of iron ore, 30% of iron ore fines and 80% of chrome ore produced by OMC will be earmarked for the local industries. The balance quantity of these ores could be supplied to the industries outside the state.
Mr Prafulla Chandra Ghadai finance minister of Orissa said that "Keeping in view the interests of the industries operating in the state and the demands made by the Kalinga Nagar Industries Association, it has been decided to reserve 70% of OMC's iron ore production for the local industries. Similarly, 80% of the corporation's chrome ore output will be set aside for the industries in the state."
For iron ore fines, it has been decided that 30% of OMC's production will be reserved for the industries in the state while 70% will be exported.
Mr Ghadai said that "We hope if the quantity of the raw materials for the industries is assured and specified, these raw materials can be made available at reasonable rates."
Mr Mohanty said that the meeting also emphasized on the need to scale up iron ore and chrome ore production of OMC. It is necessary for the OMC to step up iron ore and chrome ore output and the corporation will come out with a 20 Year Perspective Plan for this purpose.
Presently, the iron ore requirement of the state is around 20 million tonnes per annum and OMC meets 15% to 20% of the demand.
It may be noted that a three member committee consisting of the secretaries of the departments of steel & mines, industries and commerce & transport was constituted in November last year to look into the problems of the industries operating at the Kalinga Nagar Industrial Complex in Jajpur district.
The committee was constituted after Kalinga Nagar Industries Association 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.
Mr PL Kandoi president of KNIA said that "Two out of 11 industrial units operating at the KNIC have already been shut and the remaining units are operating at 30% to 50% capacity. To ensure that the units run their operations normally, iron ore pricing and logistics pricing have to be streamlines."
KNIA had suggested that OMC can supply 50% 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 of the ore, it had pointed out.
It had pointed out that prices of iron ore in the Gandhamardhan sector have surged by 191% while in the Daitari sector, there has been an upswing of 130% in iron ore prices in the past 12 months. For the third quarter of 2010-11, the OMC had fixed the price of iron ore (size 10mm to 40mm) from Gandhamardhan at INR 4155 per tonne and from Daitari, at INR 4455 per tonne.
The prices of ore from these two mines for the same period of 2009-10, were INR 1426 per tonne.
(Sourced from Business Standard)
