Odisha eases long-term linkage rules for steel plants

Odisha Mining Corporation to be allowed to execute sale agreements with long-term buyers

To ease worries for steel plants drawing raw materials from state-owned Odisha Mining Corporation (OMC), the state Cabinet today simplified the procedures for supply of ore as per the long-term linkage policy.

As per the Cabinet’s decision, OMC would be allowed to execute sale agreements with the long-term buyers. The allotment quantity to be assured under long-term linkage would be determined by a committee which would be reconstituted by the government.

It was also decided that the penalty on non-lifting of ore of at least 90% would be made applicable on the non-lifted quantum and not on the entire allotted quantity which was done previously.

"There was representation from the user industries that the penalty was excessive. So, we have decided to rationalise the penalty. Accordingly, OMC would execute revised agreements with the buyers", said R K Sharma, principal secretary (steel & mines).

These decisions are expected to improve ease of doing business for buyers of iron ore and chrome ore. As per the long-term linkage policy, OMC supplies up to 70 % of its iron ore production and 50% of its chrome ore output to industries within the state.

The Cabinet also gave its go-ahead to the creation of a separate directorate for steel keeping in view the surge in investments in the sector and problems faced by the operational steel units.

"A steel directorate would be constituted on the lines of directorate of mines and directorate of geology. The directorate would be headed by an officer of the rank of additional secretary. Independent consultants and advisors would also be engaged. We expect the steel directorate to start functioning from April 1, 2016", said chief secretary Aditya Prasad Padhee.

Though the steel & mines department is mandated to deal with the matters relating to mines as well as steel industries, there is no separate establishment within the department to deal exclusively with matters of the steel units. The directorate of steel is expected to ensure regular interaction with the promoters of steel companies to assess their problems and maintain updated data base on production.