OMC Floats EoI for Long Term Iron Ore Linkage with State Based Units

Government of Odisha has floated the EOI for long term linkage policy of iron ore to the MoU signed state based eligible end-user industries of Odisha through OMC (Orissa Mining Corporation).

At present 3 Iron Ore Mines of OMC are in operation. They are Gandhamardan Iron Ore Mine, Daitari Iron Ore Mine all in Keonjhar district. Kurmitar Iron Ore Mine is in Sundargarh district.

Mines wise quantity over & above the already Committed quantity for supply to LTL buyers earlier:

The MoU signed, state based end-user industries and public sector undertaking who have already signed LTL Sales agreement with OMC for Iron Ore may not apply again in response to this notice. However, they must submit a declaration to OMC about long term purchase agreements made by them with other iron ore lessees within the State, if any. LTL signed buyer may apply for revision of quantity.

Key highlights of the iron ore linkage policy of OMC:
1. The long term linkage should be for 5 years with the provision of annual review based on performance.
2. Quantity to be assured under long-term linkage should be determined by a committee constituted for the purpose by the government.
3. For the end users having captive mines– While deciding the linkage quantity, the authorized production capacity of the end users’ captive mines and the quantity of long term purchase agreements made by end user with other lessees within the state shall be deducted from the requirement and the balance requirement only may be committed under long term linkage.
In case end-user is unable to produce the mineral in its captive mines as per “authorized production capacity” due to reasons beyond its control, committee may allow linkage of the shortfall quantity by OMC through annual supply agreement.
4. 50-70% of saleable iron ore stock to be placed under long term linkage – Not less than 50% and not more than 70% of saleable stock will be placed under long-term linkage. Quantities offered but not lifted by allottees may be disposed through e-auction. The remaining saleable stock shall be sold through e-auction
5. Regarding long-term linkage pricing – Weighted average price derived from e-auctions will be the long-term linkage price for the appropriate grades.
6. End-user industries PSU’s will be eligible for long-term linkage – End-user PSU’s and small sized state based steel units which were earlier not eligible for entering into MoU owing small size of project will now be eligible for long-term linkage as well as to participate in the e-auction.
7. Within MoU signed steel plants, blast furnace based integrated steel plants will be given priority over others. MoU signed steel plants which are already in operation will be given preference over the MoU signed plants which are yet to be commissioned.

EOI submission due date is on 30 Nov’17.

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