Odisha based steelmakers have complained over Quantity, Price and Quality of Iron ore supplied to them through supply agreements. The companies have complained that the quantity of Iron ore decided by the state government is very low compared to their requirement. Also, the quality is very bad contrary to the grade committed in the order. In addition, they also complained that the price fixed by the state government is very high.
“We have made complains over the lower quantity of Iron ore being supplied to us, which is less than our raw material requirement. Also, material being provided to us is of lower grade, which is not suitable for our plant. On the other hand, the price fixed by the government is very high, which would increase our production cost in a scenario when the steel prices are declining,” said a senior official of a steelmaker after the review meeting chaired by the Odisha Steel & Mines Minister, Prafulla Mallick.
Steelmakers have also demanded that raw material should be supplied from the nearest Iron ore mines. The minister has assured the steel companies that adequate raw material would be provided to the steel units and all their complains will be heard.
The government on Monday called a meeting of steel players that have signed MoUs with it. The meeting was presided over by Steel & Mines Minister, Prafulla Mallick and the new Steel & Mines Secretary, R.K.Sharma and Director of Mines, Deepak Mohanty were present. However, there was no discussion on renewal of lapsed MoUs of steel companies.
The Odisha government has recently initiated steps to supply raw material to the state based Steel units, which have signed MoUs with the state government under the ‘50:50’ resolution. Accordingly, OMC & private miners have agreed to supply 50% of their produce to the steel units. OMC has agreed to supply total 2.5 MnT Iron ore to the steel units in the Jan-Mar’15 Quarter, which have signed MoU with the state. Similarly, private miners like Serajuddin, Praboh Mohanty Mines, MGM Mines, Rungta & Sons, Essel Mining and Penguin Trading & Agencies have agreed to supply total 4.2 MnT Iron ore to the steel units including JSPL, ESSAR Steel, Bhushan Steel, BRPL etc.
Steel Units cautious over Odisha Government’s Decision
The newly appointed Principal Secretary of Steel & Mines, Raj Kumar Sharma has cautioned the steelmakers that if allotment of raw materials is not executed by any particular industry, it will be debarred from getting further allotments. However, he assured them to meet them one-on-one basis to resolve the issue of raw material. Mr. Sharma after taking charge on Monday, met the Industrial Houses those have signed MoU with the state government to set up Steel Complexes and requiring Long Term Linkage (LTL) for the raw material.
Out of 33, only 11 MoU singed companies have participated in discussion with the state government and officials held today. He further said that supply issues of different Iron ore grades (Fe 63-Fe 67) to companies need to be sorted out. Regarding pricing of Iron ore, he said IBM is looking after it and OMC is engaged in e-auction of raw materials for discovery of market price.
Minister sets Production Target
Prafulla Mallick has said that the state government has decided to increase Iron ore production to reach the target of 70 MnT by the end of this financial year. This would enable to mop up revenue to the tune of INR 65 billion from the mining sector.
OMC also trying hard to improve its production level and by 31 Mar, 2015. The company plans to produce 5 MnT Iron ore. Accordingly, 2.5 MnT will be available for LTL, said sources.
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