The iron ore pricing policy of state-owned Orissa Mining Corp (OMC) is going to seriously affect iron & steel industries in the state.
Badly hit by the recent downslide in iron ore prices, the OMC could not find any takers for its ore as per prices arrived at on September 27, 2008, when it had floated tenders. It had to float a fresh tender on November 11, 2008. The OMC, in the November biddings, reportedly received offers between Rs 1000 and Rs 1700 for per tonne of lumpy and sized ores. But, surprisingly the OMC is not acknowledging new prices though they are in line with the present market rates. Taking into account the OMC?s cost of mining at around Rs 400 per tonne, the corporation?s profit margin would be in the range of 100-200%.
?The OMC always adopts a monopolistic attitude when it comes to fixing iron ore prices,? grumbled a senior executive of a steel company, which has set up facilities in Orissa. ?The OMC floats tenders for iron ore and fixes and finalises price only when that suits it. Otherwise, the corporation cancels tenders and fixes its own arbitrary prices,? he said. OMC managing director Santosh Sarangi could not be contacted over telephone, as he was busy in a meeting with the chairman.
A senior OMC official, who is involved in the tender process, however, denied the allegation of manufacturers. He told FE that prices offered by bidders were being evaluated and the procedure of the fixing the prices was on.