BHUBANEWAR: Faced with severe shortage and rising iron ore prices, state-owned steel industries urged Odisha government to invoke the “right of preemption” or the first right of iron ore for factories of state. problem with the steel and mining department, the Confederation of Indian Industries (CII) said that the low production of iron ore, its galloping shipping to other states and its exports coupled with soaring ore prices have posed a huge challenge to the state-based iron and steel industries.
Stating that iron ore production in the state in 2020-2021 was around 111 million tonnes (MT), CII said it was 23% lower compared to 145 MT in 2019-20. In terms of environmental clearance (EC) capacity of 182 million tonnes per year (MTPA) from 43 operating mines, actual production was only 60 percent (bp). In such a crisis, the export of around 46 MT of iron ore in the last fiscal year has further worsened the situation of state industries, he said.
âLarge industries and MSMEs have set up factories via the MoU with a strong government commitment to a sustainable supply of iron ore. Aside from the shortage of raw materials, Odisha’s iron ore is the most expensive in the country, making state-owned steel industries uncompetitive and unsustainable, âsaid the chairman of the State Council of the United Kingdom. CII Odisha, Manish Kharbanda. Secretary Surendra Kumar, Kharbanda said the state’s primary and secondary steel sectors are not only suffering huge losses, but the government’s failure to ensure a sustainable supply of iron ore to iron manufacturers and of steel put the lives of about 10 lakh families in stake.
The industry body urged the government to take inspiration from Karnataka and invoke the “right of preemption” under the mineral concession rules (other than atomic energy and hydrocarbon minerals), 2016 to put the iron ore available to state-based steel plants. and save thousands of jobs. Rule 12 (1) (i) says: âThe state government shall at all times have the right of first refusal over the minerals gained on the land for which the lease has been granted. The average selling price as published by IBM in effect at the time of preemption will be paid to the lessee for all such minerals.
CII further advised the government to grant the Odisha-based industry the right of first refusal on any non-preempted ore from merchant mines that is intended for export or sale outside Odisha. The pre-emption policy should also ensure that the sale of iron ore from merchant mines must take place through a transparent government-run electronic auction platform like the one in Karnataka to ensure fair price discovery.
Right of first refusal on any ore not preempted from merchant mines
Sale of iron ore to take place through government-run online auction platform
Sustainable supply of iron ore to the steel industries based in Odisha