After continuously opposing the e-auction process and asking the state government to seek permission from the Supreme Court; Odisha-based miners have finally agreed for auction of Iron ore as trial
Odisha-based producers have agreed to participate in an e-auction of Iron ore to be conducted by Metal Scrap Trade Corporation (MSTC). The auction of Iron ore will be conducted on a trial basis under the supervision of state’s Steel and Mines Department. The department’s approval was a major gateway for the state government to implement its much awaited scheme.
“In the latest discussion, the miners have decided to join the e-auction process on trial basis as they are still cynic about the process. The process should start sometime in January 2014 after the winter session of Odisha assembly is over,” said a senior official from Directorate of Mines, Odisha.
Usually, Iron ore trade is done mutually between the buyer and the miner. Wherein, every buyer negotiates with the miners for prices, giving them an opportunity to decide the suitable rates.
According to the steel makers and political parties, Odisha’s miners often quote low trade price in paper to avoid high royalty and other taxes. They prefer to sell the raw material out of the state to gain much high price..
Odisha government has thus issued an executive order in Dec, 2012 for all Iron ore miners to resolve the above mentioned matter. It asked the miners to reserve half of their monthly production for the local industries. The order is however yet not followed properly as steel makers still complain about high material prices. Also they have decided to cut short the steel production to avoid raw material shortage and its expensive rates.
Odisha government’s decision of e-auction was objected by miners saying that it was meant only for southern Indian state referring to Karnataka. They also opposed it by asking the government to seek permission from the Supreme Court to conduct the auctions. The miners have however agreed for the auctions now and the state government need not go to the Apex Court. Although the miners are doubtful about the process and are considering it to be a trial expecting better prices for the raw material.
Odisha contributes to about 35 per cent of India’s total Iron ore deposits with an output of about 60-62 MnT pa. Its major Iron ore producers are Ahluwalia, Rungta and Essel Mining.