OMC to enter into long-term supply arrangement for iron ore mines

With the stock of iron ore fines at its mining areas piling up with every passing day and impacting the mining operations, the state government owned Orissa Mining Corporation (OMC) has decided to enter into long-term supply arrangements with the prospective buyers of these fines.

OMC has invited Expressions of Interest (EOI) from the end-user units (pellet plants, sinter plants and beneficiation plants) for in-term sales arrangements of iron ore fines. The deadline for submitting the EOIs is September 13.

“The stock of iron ore fines is piling up at our mines and this is affecting our ore production. For instance, the stock of iron ore fines at our Gandhamardhan mines has climbed to 20 lakh tonnes as no evacuation has been done for the past eighteen months. OMC wants to enter into a long-term supply arrangement with the end users who will put in place a mechanized system for evacuation of these fines either through slurry pipes or conveyor belts”, Saswat Mishra, managing director, OMC told Business Standard.

Mishra said, extraction of every 100 tonnes of iron ore generates nearly 40 tonnes is iron ore fines with the remaining 60 tonnes being calibrated lump ore.

The accumulation of fines is attributed to the recently adopted policy of the company to discourage exports and encourage pelletisation and sintering of fines for use in the domestic steel industry.

“We want to sell the iron ore fines to the units which are already operational in the state like pelletisation plants, beneficiation plants and sinter plants. The evacuation of iron ore fines which will be a continuous process, will be a win-win situation for OMC as well as the end-user units who will be buying these fines”, he added.

Asked if OMC was considering a revision in prices of iron ore and chrome ore, he said, “OMC revises prices of iron ore and chrome ore once in a quarter. Our prevailing prices of these two ores are valid till the end of September this year and we will be inviting tenders for a price revision by the end of September. The ore prices will be determined by the prevailing prices in the national and international markets.”

Mishra pointed out that the prices of iron ore and chrome ore have somewhat stabilized in this fiscal compared to the sharp fluctuations that were witnessed in 2009-10.

In the Barbil sector, the current price of iron ore fines is Rs 1150 per tonne.

In the Gandhamradhan sector, the price of iron ore fines ranges from Rs 1852-Rs 2105 per tonne.

On the other hand, the lump ore prices in this sector varies from Rs 2502-Rs 4300 per tonne depending on the ore thickness and iron content.

Similarly, in the Koira sector, the price of lump ores is in the range of Rs 1252-3652 per tonne while in the Daitari sector, it is Rs 2352 per tonne.

The price for sale of chrome ore of OMC presently ranges from Rs 5318-Rs 10,532 per tonne.