Odisha state government, who allocated 4.2 MnT of Iron ore to stand alone state based industries under its gazetted notification dated on 26 Jun’14 complying 50:50 rule, has drawn mixed response from steelmakers within the state.
Sponge & Pellet manufacturers, who have been allocated Iron ore for Q4 FY15 (Jan-Mar’15), are unwilling to lift their quota on reasons such as:
1. High Iron ore prices compared to current market price
2. Quality & size of Iron ore allocated
Steelmakers blamed that allocations made by the state government have several ambiguities. Most of them complained that prices are fixed considering IBM (Indian Bureau of Mines) monthly average prices, which is not acceptable. It is not clear that prices are basic or including royalty.
“Most of the Sponge manufacturers are not wiling to lift Iron ore allotted to them. Current market prices are lower than what the state government has referred. Also, we need to deposit 10% of total value with the state government and 100% advance to miners. Financial situation of steel industry is not so healthy that they afford to block their capital,” said a member of All Odisha Steel Federation.
Another Pellet manufacturer in the state, who has been allotted about 0.7 MnT, mentioned that Iron ore prices are declining in the state but reflection in IBM monthly prices will take time. We are at the losing end.
A manufacturer, who got an allotment of 36,000 MT lump mentioned, “There is no clarity if lumps are calibrated or screened. What are other chemical specifications and what if any dispute occurs between miners and steelmakers.”
Overall, 50:50 rule brings a cheer to Odisha based steel industry but implications are complicated.
List of Allotments
| Company Name | Material | Allotted Quantity |
| Sri Madhu Ispat | Lump | 24,000 |
| Patnaik Steel | Lump | 44,000 |
| Ganesh Sponge | Lump | 36,000 |
| Agrasen Sponge | Lump | 24,000 |
| Pooja Sponge | Lump | 15,000 |
| Shiv Metaliks | Lump | 24,000 |
| Prabhu Sponge | Lump | 24,000 |
| Jay Iron & Steel | Lump | 24,000 |
| Pro Minerals | Fines | 180,000 |
| Maa Samaleswari Industries | Lump | 24,000 |
| Balaji Metaliks | Lump | 12,000 |
| Suraj Products | Lump | 18,000 |
| Sponge Udyog | Lump | 24,000 |
| Vikram Pvt Ltd | Lump | 24,000 |
| Hari Sponge | Lump | 27,000 |
| K J Ispat | Lump | 12,000 |
| BRG Iron & Steel | Lump | 24,000 |
| Viraja Steel | Lump | 6,000 |
| Bhushan Steel | Lump | 600,000 |
| SMC Power | Lump | 72,000 |
| Arya Iron & Steel | Fines | 300,000 |
| International Minerals & Trading | Fines | 450,000 |
| Essar | Fines | 1,750,000 |
| BRPL | Fines | 130,000 |
| JSPL | Fines | 434,000 |
| Total | 4,302,000 | |
Quantity in MT
Source: SteelMint Research
Leave a Reply