OMC reduces iron ore prices

Orissa Mining Corporation (OMC), the state owned mining company, has rationalised the price of iron ore sold by it to different industries in the state.

Sources said, the price of the iron ore with 62 percent Fe content has been reduced from Rs 3051per tonne to Rs 1709 for Daitari sector and from Rs 3519 to Rs 1704 per tonne in the Koira sector (Khandadhar).Similarly, the price of iron ore with 62 percent Fe will be reduced from Rs 2571 to Rs 1500 per tonne for Gandhamardan sector which since it has high silicon and aluminium content.

The revised price will be implemented retrospectively from the date of notification. Steel and sponge iron units in the state have been demanding the reduction in price of iron ore by OMC to help them cope with the global slowdown. Since these units are feeling the heat of the global meltdown, they had appealed OMC to reduce the price of iron ore.

As a measure in that direction, OMC decided to retender the prices of iron ore with the highest price for iron ore having 62 percent Fe content quoted at about Rs 1100 per tonne.

OMC completed the re-tendering process by 11 November 2008 and sought the approval of the finance department for its proposed price reduction. The finance department cleared the file last week authorising the administrative department (steel and mines department) to go ahead with the proposal.

The technical committee of OMC held discussion on the revised price comparing it with the price of sponge iron, billets and pig iron. Though the revised price is yet to be notified, the sources said, it is more or less similar to the price that prevailed in July-Sept, 2007 with minor modifications.

“We have adopted the new price for sale of iron ore and it will be effective prospectively”, Santosh K Sarangi, managing director, OMC told Business Standard.

On the price of iron ore being higher than the re-tender price, Sarangi said, the re-tender price was abnormally low. So the technical committee after examining the price of sponge iron, billet and pig iron arrived at this price.

However, the industries seeking price reduction are far from being impressed with the latest price revision. “No industry will be able to lift iron ore at this price and the units depending on OMC cannot start their operation”, S N Misra, Chief Administrative Officer, Kalinga Nagar Industries Association said.