Kicking off the restructuring process of Orissa Mines Corporation (OMC), which has a reserve of less than 1 billion tonne iron ore, the steel ministry has asked for the state-run company?s opinion on its possible merger with either Steel Authority of India Ltd or National Mineral Development Corporation (NMDC).
?We have asked OMC?s opinion on the possibility of a merger and we will go ahead only after we hear from them. Bagchi Committee, in its report, has suggested pros and cons on the possibility of its merger with units such as SAIL and NMDC,? steel secretary RS Pandey told FE.
OMC management was not available for comments on the issue. Sources in the Federation of Indian Mineral Industries, however, said it seemed difficult that the management would agree for a merger.
OMC has a reserve of over 900 million tonne iron ore and has mining leases at 35 locations, spread over the state. It is technically not a public sector undertaking, as the Orissa government has less than 51% stake in it.
Nonetheless, the unit is controlled by the state government and contributes significantly to the state exchequer. It is the largest state PSU in the country?s mining sector with a turnover of more than Rs 1,000 crore.
The first quarter turnover of the company in 2007-08 was reported to be at an all-time high of Rs 332.04 crore, which was 68% rise compared to Rs 197.62 crore turnover during the corresponding period of the previous year, a statement in its website said.
Independent steel analyst AS Firoz said if OMC was merged with either of the two central agencies, it would lose its identity and the control would go from state government to the Centre as the two public sector units come under the Centre. As far as royalty to the state government is concerned it would not change, but the entire profits (post merger) would go tothe Centre.