No preferential rate for iron ore, says OMC

Last Updated: Sat, Feb 02, 2013 04:22 hrs

The government controlled Odisha Mining Corporation (OMC) has rejected the demand of the state-based steel mills to supply them iron ore at concessional rate stating that it does not want to rake up 2G spectrum allotment like controversy by favouring certain industries.

“We are aware of the raw material supply problem faced by the steel makers. But in the post 2G scam era, we cannot sell ore at lower than market price,” said Saswat Mishra, chairman-cum-managing director (CMD) of OMC, at the Minerals and Metals Odisha Conclave 2013, organised by Indian Chambers of Commerce (ICC) here.

Citing the example of National Mineral Development Corporation, he said, while one side the steel industries are accusing the central PSU of selling iron ore at high price, on the other hand, CAG has pulled up the company on pricing issue, saying it could have earned more, had it followed fair market practice to sell ores.

Odisha-based steel plants have been complaining that the “faulty” auction process of OMC is not only jacking up the prices of iron ore sold by the company, but also influencing the rates of ore produced by other private miners.

All Odisha Steel Federation (AOSF), representing the interest of steel industries, had even gone to the Competition Commission of India (CCI) against OMC. The commission, however, rejected their plea saying that being a minor player in iron ore trading in the state, OMC cannot be accused of monopoly.

OMC maintained that if Chinese buyers can make profit by buying iron ore at the same rate, there is no basis for Indian steel companies to crib about the prices. However, Indian steel producers said, they cannot be compared with China, which has fuel advantage.

“The cost involved in steel making in India cannot be compared with that of China, because it does not import coking coal, but we do. Therefore, we cannot afford to buy at the same rate,” said Manish Agarwal, director, MSP Steel. China is the largest producer of coking coal in the world.

To address the iron ore supply and pricing issue, the state government has formulated an inter-ministerial group (IMG), which will give its report by the end of April.

“We have concluded discussion on iron ore supply issues. We will focus next on chromite, which will be followed by bauxite,” said Rajnikant Singh, state steel and mines minister.

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