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JSW Steel plans tie-up with OMC for long-term iron ore linkage

Seeks to secure supplies for its 10-mn-tonne mega project on which it has committed Rs 50,000 cr

Jayajit Dash  |  Bhubaneswar 

JSW Steel plans tie-up with OMC for long-term iron ore linkage

Sajjan Jindal-led is keen to have a long-term linkage arrangement with the state government-controlled (OMC) to secure supplies for its planned 10-million tonne steel plant.
 
The company has committed an investment of Rs 50,000 crore in the steel mill and an additional Rs 3,500 crore on associated infrastructure such as coal and berths and a slurry pipeline.


 
wants to secure long-term supplies for its proposed steel project in Odisha. For feeding the steel plant, it needs 16 million tonnes of annually.
 
The company has discussed this with the state government, though there is no definitive proposal yet,” said a senior government official with the industries department.
 
At present, OMC provides to many steel units running in Odisha without captive mines. The ore is offered through electronic auctions, which are normally conducted every alternate month. A steel unit or any other end-use plant can source either through pre-emption or long-term linkage.
 
Under pre-emption, the Odisha government has a policy to reserve at least 50 per cent of the ore produced by the merchant miners for state-based end-use plants.
 
In Odisha, Essar Steel, Visa Steel, Ltd (JSPL), Ltd, and MMTC-promoted Ltd (NINL) are among the steel units that buy from OMC through long-term linkage. For JSW Steel, having a long-term linkage arrangement with OMC makes sense as the state-run miner was mulling a cut in the floor price of the ore offered through this route.
 
Steel and other end-use industries were already pressing for a discount of 20 per cent on they buy from OMC via long-term linkage. Even is examining the possibility of clinching a long-term pact with OMC to secure for its Kalinganagar plant.  R Vineel Krishna, managing director of OMC, could not be immediately contacted for comment.
 
For JSW Steel, the other workable route is getting an block through competitive bidding. has bid for the Kalamang block which has been opened up for auctions in Odisha. The Kalamang block, reserved for an integrated steel plant, has also got competing offers from Ltd, Ltd, Ltd, Ltd, Rashmi Metaliks Ltd, Thakur Prasad Sao and Sons Ltd, JSPL, Ltd, RINL, and Shri Jagannath Steels & Power Ltd. A source at said, “We keep evaluating different options for security. Our priority is to win a block through auctions. But, we are also open to buying ore from  OMC or merchant miners if our bid is not successful.”
 
Earlier, has unsuccessfully bid for the Ghorburhani-Sagasahi block in Odisha which went to
 
The 10-million-tonne steel project by is proposed to come up in two phases — four million tonnes in the first phase and later ramped up to full capacity. The location for the steel unit is yet to be zeroed in though the company has opted for a shore-based location near the

Mega investment on the cards
  • JSW is planning a long-term pact with for secure supplies
  • The idea is to secure supplies for its planned plant of 10 million tonne capacity
  • Annual requirement for the planned steel unit is 16 million tonne
  • Company has also bid for the Kalamang block auctioned in Odisha

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JSW Steel plans tie-up with OMC for long-term iron ore linkage

Seeks to secure supplies for its 10-mn-tonne mega project on which it has committed Rs 50,000 cr

Seeks to secure supplies for its 10-mn-tonne mega project on which it has committed Rs 50,000 cr Sajjan Jindal-led is keen to have a long-term linkage arrangement with the state government-controlled (OMC) to secure supplies for its planned 10-million tonne steel plant.
 
The company has committed an investment of Rs 50,000 crore in the steel mill and an additional Rs 3,500 crore on associated infrastructure such as coal and berths and a slurry pipeline.
 
wants to secure long-term supplies for its proposed steel project in Odisha. For feeding the steel plant, it needs 16 million tonnes of annually.
 
The company has discussed this with the state government, though there is no definitive proposal yet,” said a senior government official with the industries department.
 
At present, OMC provides to many steel units running in Odisha without captive mines. The ore is offered through electronic auctions, which are normally conducted every alternate month. A steel unit or any other end-use plant can source either through pre-emption or long-term linkage.
 
Under pre-emption, the Odisha government has a policy to reserve at least 50 per cent of the ore produced by the merchant miners for state-based end-use plants.
 
In Odisha, Essar Steel, Visa Steel, Ltd (JSPL), Ltd, and MMTC-promoted Ltd (NINL) are among the steel units that buy from OMC through long-term linkage. For JSW Steel, having a long-term linkage arrangement with OMC makes sense as the state-run miner was mulling a cut in the floor price of the ore offered through this route.
 
Steel and other end-use industries were already pressing for a discount of 20 per cent on they buy from OMC via long-term linkage. Even is examining the possibility of clinching a long-term pact with OMC to secure for its Kalinganagar plant.  R Vineel Krishna, managing director of OMC, could not be immediately contacted for comment.
 
For JSW Steel, the other workable route is getting an block through competitive bidding. has bid for the Kalamang block which has been opened up for auctions in Odisha. The Kalamang block, reserved for an integrated steel plant, has also got competing offers from Ltd, Ltd, Ltd, Ltd, Rashmi Metaliks Ltd, Thakur Prasad Sao and Sons Ltd, JSPL, Ltd, RINL, and Shri Jagannath Steels & Power Ltd. A source at said, “We keep evaluating different options for security. Our priority is to win a block through auctions. But, we are also open to buying ore from  OMC or merchant miners if our bid is not successful.”
 
Earlier, has unsuccessfully bid for the Ghorburhani-Sagasahi block in Odisha which went to
 
The 10-million-tonne steel project by is proposed to come up in two phases — four million tonnes in the first phase and later ramped up to full capacity. The location for the steel unit is yet to be zeroed in though the company has opted for a shore-based location near the

Mega investment on the cards
  • JSW is planning a long-term pact with for secure supplies
  • The idea is to secure supplies for its planned plant of 10 million tonne capacity
  • Annual requirement for the planned steel unit is 16 million tonne
  • Company has also bid for the Kalamang block auctioned in Odisha

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Business Standard
177 22

JSW Steel plans tie-up with OMC for long-term iron ore linkage

Seeks to secure supplies for its 10-mn-tonne mega project on which it has committed Rs 50,000 cr

Sajjan Jindal-led is keen to have a long-term linkage arrangement with the state government-controlled (OMC) to secure supplies for its planned 10-million tonne steel plant.
 
The company has committed an investment of Rs 50,000 crore in the steel mill and an additional Rs 3,500 crore on associated infrastructure such as coal and berths and a slurry pipeline.
 
wants to secure long-term supplies for its proposed steel project in Odisha. For feeding the steel plant, it needs 16 million tonnes of annually.
 
The company has discussed this with the state government, though there is no definitive proposal yet,” said a senior government official with the industries department.
 
At present, OMC provides to many steel units running in Odisha without captive mines. The ore is offered through electronic auctions, which are normally conducted every alternate month. A steel unit or any other end-use plant can source either through pre-emption or long-term linkage.
 
Under pre-emption, the Odisha government has a policy to reserve at least 50 per cent of the ore produced by the merchant miners for state-based end-use plants.
 
In Odisha, Essar Steel, Visa Steel, Ltd (JSPL), Ltd, and MMTC-promoted Ltd (NINL) are among the steel units that buy from OMC through long-term linkage. For JSW Steel, having a long-term linkage arrangement with OMC makes sense as the state-run miner was mulling a cut in the floor price of the ore offered through this route.
 
Steel and other end-use industries were already pressing for a discount of 20 per cent on they buy from OMC via long-term linkage. Even is examining the possibility of clinching a long-term pact with OMC to secure for its Kalinganagar plant.  R Vineel Krishna, managing director of OMC, could not be immediately contacted for comment.
 
For JSW Steel, the other workable route is getting an block through competitive bidding. has bid for the Kalamang block which has been opened up for auctions in Odisha. The Kalamang block, reserved for an integrated steel plant, has also got competing offers from Ltd, Ltd, Ltd, Ltd, Rashmi Metaliks Ltd, Thakur Prasad Sao and Sons Ltd, JSPL, Ltd, RINL, and Shri Jagannath Steels & Power Ltd. A source at said, “We keep evaluating different options for security. Our priority is to win a block through auctions. But, we are also open to buying ore from  OMC or merchant miners if our bid is not successful.”
 
Earlier, has unsuccessfully bid for the Ghorburhani-Sagasahi block in Odisha which went to
 
The 10-million-tonne steel project by is proposed to come up in two phases — four million tonnes in the first phase and later ramped up to full capacity. The location for the steel unit is yet to be zeroed in though the company has opted for a shore-based location near the

Mega investment on the cards
  • JSW is planning a long-term pact with for secure supplies
  • The idea is to secure supplies for its planned plant of 10 million tonne capacity
  • Annual requirement for the planned steel unit is 16 million tonne
  • Company has also bid for the Kalamang block auctioned in Odisha

image
Business Standard
177 22