JSPL has responded to the Odisha government’s query as to why it seeks iron ore under a pre-emption policy when it has been exporting pellets.
It first defended its requirements of 18 mntpa which it needs for its steel plant of 6 mnt pa capacity and its pellet plant, Odisha’s largest, of 10 mntpa. With a total investment of more than Rs 45,000 crore JSPL was perhaps Odisha’s largest investor, claimed VR Sharma MD JSPL’s letter. It clarified that the company was “not requesting for reinstatement of the preemption policy of iron ore for Odisha-based plants as it appreciates the State Government already has an excellent pre-emption policy (2014) along with a clearly laid out procedure to seek allocation of material under the same.”
In defence of its claim of “an unprecedented surge in prices of iron ore and acute shortage” the steelmaker said it was not the only one making this charge. Responding to the state’s 5 July 2021 letter, JSPL pointed out that IBM data that the government was citing was published with a delay of 45 days. “The prevailing sale price of 62% Fe fines in June 21 is hovering at Rs 9600 per tonne, which is 502% higher than the average sale price of Rs 1594 per tonne in May 20. Similarly, the prevailing prices of 63% Fe fines is hovering at Rs 10, 200 tonne which is 501% higher compared to ASP of Rs 1696 per tonne in May 20.”
It also gave a detailed explanation of why its blast furnaces being designed for a carefully calibrated mix of high-grade feed of CLO, pellet and sinter could not consume low-grade iron ore in any form without compromising operational efficiency.
JSPL had only lifted 11.28% of its long term allocation from OMC because it had finally, after six long years, been allowed to access the 13.5 mnt of iron ore it had bought from Sarda Mines Private Ltd. This it had been consuming, improving its performance and since had increased its offtake from OMC, lifting in the of June 21 68% of its allotted quantity.
Mr Sharma added that JSPL business goals were aligned with the Government of Odisha’s vision to enable the state to become the largest contributor to the country’s GDP and towards this had recently secured government nod to expand capacity at Angul to 25.2 mnt pa.
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