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Odisha commits iron ore for all steel units

The ore would be supplied through mine leases held by state owned Odisha Mining Corporation (OMC)

BS Reporter  |  Bhubaneswar 

The state government would make available iron ore for all state based steel industries, including the units that have not signed memorandum of understanding (MoU) with the government. The ore would be supplied through mine leases held by state owned Odisha Mining Corporation (OMC).

“The government has already implemented the 50:50 resolution wherein iron ore would be made available to all state based steel units both within and outside the MoU framework. The industries have welcomed this step of the government,” said director (mines) Deepak Mohanty.

He said, the government today called a meeting of the steel players that have signed MoUs with it. The meeting was presided over by steel & mines minister Prafulla Mallick. However, there was no discussion on renewal of lapsed MoUs of steel

Recently, OMC agreed to supply 2.5 million tonne of iron ore to the state based steel units for the January-March quarter of this fiscal as per the 50:50 resolution of the state government announced in December 2012.

As per the resolution, standalone miners were to offer at least 50 per cent of their iron ore output to state based units Later, the resolution was also made applicable to OMC.

OMC will offer the iron ore as long-term linkage to the MoU signed steel which are operating without ore linkages. The committed quantity would be supplied to 18 steel units before the end of this fiscal. Steel industries that would benefit from the move are Bhushan Steel Ltd, Bhushan Power & Steel Ltd, Jindal Steel & Power Ltd (JSPL), Visa Steel and Nilachal Ispat Nigam Ltd (NINL).

Though 31 out of 48 MoU signed steel units have commenced partial or full scale production, they are struggling to keep their operations afloat due to raw material scarcity.

Out of the agreed quantum of 2.5 million tonne of iron ore, 60 per cent would be allotted for steel made through the blast furnace route and the rest 40 per cent via DRI (direct reduced iron) route. The agreed quantum is 50 per cent of OMC’s iron ore output expected to be five million tonne this fiscal.

Last week, the steel units were also allotted 4.2 million tonne of iron ore for the January-March quarter from the mines of standalone private merchant miners.

The steel industries to benefit from the allotment are Jindal Steel & Power Ltd (JSPL), Essar Steel, Brahamani River Pellets Ltd (BRPL), Bhushan Steel, SMC Power Generation and Pattnaik Steel & Alloys Ltd to name a few.

The merchant miners who would supplying ore to the state based steel units are- Sirajuddin & Company, Indrani Patnaik, MGM Minerals Ltd, Rungta Sons Ltd, Prabodh Mohanty, Penguin Trading & Agencies Ltd and Essel Mining & Industries Ltd.

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First Published: Mon, December 22 2014. 20:30 IST