KNIA urges Odisha govt to reduce floor price of chrome ore at auctions
The downstream chrome ore processors in the state have urged the government to reduce the floor price of chrome ore at auctions held by Odisha Mining Corporation (OMC) last month because of the falling price of ferrochrome.
The Kalinga Nagar Industries Association (KNIA), a representative body of mineral processors and ferrochrome producers, has written a letter to Chief Minister Naveen Patnaik requesting him to remove the ''arbitrary formula'' by the OMC for calculating the floor price of chrome ore which has effectively increased the price of it.
''Due to extremely high and arbitrary floor price of chrome ore being fixed by OMC, the e-auctions of the state-owned company have had a very poor response and ferrochrome industries in Odisha who are LTL buyers of OMC are suffering,'' said the president of KNIA, P L Kandoi in his letter.
He claimed that during the e-auction held on April 23, 2021, only 14,800 MT of chrome ore out of 35,100 MT was sold due to a very high floor price. Similarly, the earlier e-auctions on January 1, 2021, February 10, 2021, and March 15, 2021, also had very poor responses due to the same reason.
KNIA had earlier requested the OMC to reduce the chrome ore floor price formula from 13.5 percent to 12.65 percent of chrome price.
OMC has fixed the chrome ore floor price based on the formula at 13.5 percent of ferrochrome price with a correction factor. Based on this, the floor price should have been Rs 13,457 per MT for 48-50 grade chrome ore during e-auction.
However, OMC has arbitrarily added an amount of Rs 3,070 per MT to the formula for calculating the floor price of chrome ore (making it Rs 16,527 per MT), they said.
Although OMC did not sell 100 percent of the quantity of chrome ore through e-auction, it is still applying such a high floor price to Odisha-based LTL (Long term linkage) buyers, they claimed.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)