Orissa to frame pricing policy for ore supply to local industries

Amid allegations of supply of mineral ores at exorbitant prices by Orissa Mining Corporation (OMC) to the local steel industries, the state government has decided to frame a pricing policy for raw material sales to mineral processing units.

The policy, which is expected to be formulated soon, is aimed at ensuring raw material supply to the existing units and industries coming up through the MoU (Memorandum of Understanding) route, at optimum prices.

“We will be coming out with a pricing policy for supplying raw materials to the local industries at optimum prices. The policy will take into account the international prices, London Metal Exchange (LME) prices and price at which National Mineral Development Corporation (NMDC) is selling iron ore. Besides, we will also take the views of experts. The cost of production will be factored in while determining ore prices and the state government will ensure that our ore prices are in sync with global market trends,” state minister for finance & public enterprises Prafulla Chandra Ghadai told reporters.

An inter-ministerial committee of the state government chaired by the finance minister met on Tuesday to address concerns of steep cost of raw materials raised by local industries.

Ghadai said, the meeting remained inconclusive as the committee needed some additional information relating to mineral ore output of OMC and and overall raw material requirement of existing and upcoming industries in the state. The information is expected to be made available to the committee in the next 15 days.

The committee has stressed on scaling up ore output of OMC to cater to the need of the upcoming industries in the state, Ghadai said.

The All Orissa Steel Federation, a body representing the interests of the steel industries operating at Kalinga Nagar, the steel hub of the state, had hit out at OMC for offering raw materials at steep prices. It had alleged that exorbitant ore prices had rendered many steel units unviable, forcing them to shed manpower and cut production.

Orissa had earlier announced it would reserve 70 per cent of OMC's iron ore produce for the local industries.