Odisha ramps up iron ore allocation for local units

PSUs, non-MoU units to benefit from revised policy

The state cabinet today approved an amendment to the long-term linkage policy for supply of iron ore and chrome ore to local end-use industries.

Under the modified policy, the quantity of iron ore to be offered under long-term linkage has been stepped up from 50 per cent to 70 per cent of saleable stock of state-run miner Odisha Mining Corporation (OMC).

"Due to modification in long-term linkage policy, more iron ore will be available for state based end-use plants. Even non-MoU (memorandum of understanding) based units and PSUs like Neelachal Ispat Nigam Ltd (NINL) can also benefit from this revised policy," principal secretary (steel & mines) R K Sharma said.

The allotment of chrome ore for such units would stand unchanged at 50 per cent of OMC's production.

The long-term linkage policy was promulgated in September 2014 for supply of iron ore and chrome ore.

As per the modified policy, OMC will fix the exact quantity taking into account its production and the demand from local end users.

While deciding the linkage quantity, the authorised production capacity of all its own leases and the quantity of long-term purchase agreement made by the end users with other lessees within the state is to be excluded from the calculation. This will encourage the captive lessees to utilise their captive production capacity in full.

The revised policy will enable non-MoU based PSUs and smaller size end use plants (which were not eligible for signing MoU due to small capacity level) eligible for long-term ore linkage.

The quantity of ore not disposed through long-term linkage will be offered via national e-auction.

It may be noted that pre-emption of iron ore to the extent of 50 per cent was done as per the state government's resolution notified in December 2012. According to this resolution, standalone miners were to offer at least 50 per cent of their iron ore production to state based units. Later, the resolution was also made applicable to OMC.

In the January-March quarter of 2014-15, OMC had committed supply of 2.5 million tonne of iron ore for local end-use industries.