Orissa Mining Corp?s arbitrary fixing of iron and chrome ore prices has pushed several Kalinga Nagar Industrial Complex units to the brink of closure, according to the Kalinga Nagar Industries Association.
The association, while complaining about the OMC?s monopolistic attitude, has sought chief minister Naveen Patnaik?s intervention in the matter to save the steel and ferro chrome industries in the complex.
OMC, the main supplier of iron ore and the sole supplier of chrome ore to industries in the state, has deviated from the three-year-old system of accepting highest bidder (H1) rates and decided to impose its own rates arbitrarily for the raw materials. Though the corporation agreed for a re-tender in November 2008 keeping in view the economic recession, it surprisingly fixed iron ore price at Rs 1,709 against the H1 rate of 1,179 for December 2008. Chrome ore price was fixed at Rs 10,350 against H1 rate of Rs 9,500.
For the period from January to February 15, 2009, it continued with the iron ore rate against the H1 rate of Rs 911 and for 50-52% grade chrome ore it declared the price of Rs 4,869 over H1 rate of Rs 2,835.
“As it is, the global recession has impacted the steel industries so hard that they have incurred heavy losses in the October-December 2008 quarter with more than 25% of the capital eroded,” said association president PK Kandoi.
With OMC resorting to such monopolistic tactics, the fourth quarter of the 2008-09 fiscal could spell disaster for the units, he cautioned.
Association secretary Vinod Kumar said the OMC has been fixing different rates for raw materials depending on the mines. The same grade iron ore from the Barbil region is fixed at Rs 1,150, and from the Daitari region at Rs 1,709, even though the raising and production costs are almost the same, he added.
The association has urged the chief minister to direct OMC to fix prices as per the market condition and save the industries located in the high-profile industrial hub of the state.