India: OMC to facilitate Long-term Linkage with Steel & Chrome Companies

Odisha government has offered to put in place a long-term raw material linkage policy, initiated in 2012, to supply Iron & Chrome ore.

Odisha government has decided to facilitate MoU (Memorandum of Understanding) signed Steel & Chrome based companies through long-term linkage for sale or supply of material like Iron ore, Chrome ore and Chrome concentrate.

In this context, OMC has invited application for such long-term linkage from the MoU signed Steel companies of Odisha and state based end-users plant of Chrome ore & Chrome concentrate. Long term linkage shall be for 5 years.

Iron Ore Linkage

The state-owned miners will provide 50% of its Iron ore production to such companies, while, it would sell the rest in open market.

“The companies will get assured supply but will have to pay the market price, which will be derived through auction process,” stated by OMC’s Chief Secretary.

To view list of MoU holders in the state: Click here  

Iron Ore Price Determination

• Weighted average price derived from the national e-auction will be long-term linkage price for the appropriate grades. Over and above, the long-term linkage, eligible companies can also take part in the national e-auction
• From amongst the MoU signed Steel Plants, Blast Furnace based integrated Steel Plants will be given priority over others 

Chrome Ore Linkage

• 70% of the saleable stock shall be made available for long-term linkage to state-based end-users
• The remaining 30% of saleable stock shall be sold through the national e-auction
• OMC will ensure requirement of Chromite supply to all state-based companies 

Chrome Ore Price Determination

• Weighted average price derived from the national e-auction shall be the long-term linkage price for appropriate grades
• State-based end-users plants having long-term linkage can also take part in the national e-auction

Important Date

Submission & opening date: Upto 15 Oct, 2014 

OMC Production

OMC had produced 1.87 MnT Iron ore and 0.58 MnT Chrome ore in FY14. In FY15, the company has targeted to produce 5.5 MnT from the three major mines. Similarly, in FY16, it eyes to produce 7.9 MnT Iron ore from Daitari, Gandhamardan B and Kurmitar Iron ore mines. While, in FY17, production of Iron ore by OMC is set to 9.5 MnT, according to company sources.