（August 4, 2014）Odisha Mining Corporation (OMC), a major chrome ore producer in the country, is considering a proposal to enter into long term ore supply pact with Jindal Stainless Ltd (JSL) for its Kalinganagar plant.

The state-run PSU has already sent a proposal in this regard to the state government for necessary action, sources said.

“We are awaiting the response of the government over the proposal of OMC to enter into long term supply pact with user industries,” said a person with the direct knowledge of the matter.

The proposal did not contain name of any specific company for chrome ore supply, the source said.

However, industry sources said the proposal was meant for JSL only as local industries producing ferrochrome such as Tata Steel, Indian Metals and Ferro Alloys (IMFA), Balasore Alloys and state-run Industrial Development Corporation Ltd (IDCOL) have their own chrome ore mines. Though JSL also has been granted a captive chrome mine spread over 89 hectare at Sukinda valley, it transports the raw material to be used at its Vishakhapatnam and Hissar plants.

OMC recommendation indicated that the chrome ore should be supplied to industries who produce stainless steel here, they said.

JSL has a one million tonne stainless steel flat product plant at Kalinganagar. It is currently buying chrome ore from OMC through participation in online auctions, which often result in stoking up the prices of the material, affecting the profit margins.

The company has been trying to get another chrome ore lease in Odisha for its Kalinganagr plant and was also trying to strike a deal with OMC for long term supply of raw material to avoid the expensive auction route.

Nearly all of India’s chrome ore is produced in Odisha, with OMC having control of a little over a third of production.

OMC sources, however, said the recent proposal favouring JSL was not an isolated one.

“There were several proposals by OMC to enter into long-term supply pact with industries who require chrome ore and iron ore as raw material. These proposals were made as the government is willing to provide raw material linkage to industries who have set up units here,” said an official of the state-run miner.

In 2012, the state government had constituted a committee to formulate policies for providing raw material to local industries after Sesa Sterlite was forced to shut down its alumina refinery unit at Lanjigarh for a brief period for want of bauxite. Though the details of the recommendations of the committee is yet to be made public, OMC has been entrusted with the task of providing raw material to industries out of its own mining leases containing iron ore, manganese and chrome ore deposits.

• [Editor:Juan]