Archive for the 'OMC' Category

OMC’s increasing profit and its contribution to Odisha’s coffer

MINES and MINERALS, Mining royalty, OMC Comments Off on OMC’s increasing profit and its contribution to Odisha’s coffer

Following is an excerpt from a report in

The state owned Orissa Mining Corporation (OMC) today paid a dividend of Rs 250 crore to the Orissa government for the year 2008-09. …

OMC has been paying dividend continuously for last five years with the dividend increasing from Rs 60 crore in 2004-05 to Rs 200 crore in 2007-08.

…  OMC was able to prove its resilience with the highest turnover of Rs 2085 crore during the year.

The profit before tax (PBT) of OMC increased from Rs 528.04 crore to Rs 1890.22 crore in 2008-09.

OMC and Vedanta joint venture South-West Orissa Bauxite Mining Private Ltd. is in the process of being formed

Aluminium, Anil Agarwal, Bauxite, Business Standard, Kalahandi, OMC, Supreme Court, Vedanta 1 Comment »

Following is from a report in Business Standard.

The joint venture (JV) Company formed between the state owned Orissa Mining Corporation (OMC) and Sterlite Industries India Ltd (SIIL) for mining of bauxite in the Niyamagiri hills in Kalahandi district will be incorporated as a Private Limited Company soon.

.. “The draft memorandum of association (MoA) and Articles of Association (AoA) of the new company has been submitted to OMC for approval. The incorporation of the JV company will be completed shortly after the approval”, P K Panda, vice-president (mines), Vedanta Aluminium Ltd.(VAL) told Business Standard.

The process of incorporation of the Joint Venture company named as “South-West Orissa Bauxite Mining Private Ltd.” has been set in motion after the signing of the modified JV agreement between SIIL and OMC in February this year, paving the way for start of bauxite mining in Niyamgiri hills near Lanjigarh.

Meanwhile, the special purpose vehicle (SPV) namely ‘Lanjigarh Scheduled Area Foundation’ has already been formed and SIIL has deposited Rs 20 crore up to 2008-09 with the SPV for overseeing the all-round development in the Lanjigarh area.

Supreme Court in its judgement on 8 August 2008 cleared mining of bauxite in the Niyamgiri hills located in the Kalahandi district by SIIL following affidavits filed by SIIL, OMC and Orissa government accepting the rehabilitation package suggested by it on 23 November 2007.

While the company has deposited Rs 12 crore for tribal development, another Rs 10 crore is proposed to be deposited with the SPV during 2009-10. As part of its plan for the overall development of the area, the company also intends to provide connectivity to all the villages of Dongria Kandh, which are remotely located.

This is in line with the 5-year development plan drawn up for these villages by the Dongria Kandh Development Authority (DKDA).

Regarding the JV agreement of Vedanta Aluminium Limited (VAL) with OMC for getting the raw material linkage, the apex court had stated that since Vedanta Resources Plc is not an indian company, it will not have any objection if the its indian subsidiary (SIIL) is made the JV partner of OMC.All provisions of the supreme court judgement were incorporated in the modified JV agreement signed by OMC and SIIL

It may be noted, VAL, a Sterlite group company, signed the JV agreement with the OMC on 5 October 2004, for developing bauxite mines at the Niyamgiri hill near Lanjigarh in Kalahandi district and the Khambasi hill in the adjoining Rayagada district. The bauxite was to be used for use in its one million tonne alumina refinery at Lanjigarh.

Orissa plans to make its own thermal power plant

Angul, Odisha govt. action, OMC, Thermal Comments Off on Orissa plans to make its own thermal power plant

Following is  from a report in livemint.

Around 300 people would get directly absorbed in the proposed 2,000 mw thermal power plant in Orissa’s Angul district that is likely to be completed by 2014 at an investment of Rs8,000 crore, an official said Friday.

The project would be developed by the newly-formed Orissa Thermal Power Corp. Ltd (OTPCL), a joint venture of the state-owned Orissa Mining Corp. (OMC) and Orissa Hydro Power Corp. (OHPC), an official said Friday.

“Both OMC and OHPC will have equal share in equity for the Rs8,000 crore project,” said state energy minister S.N. Patro. Seventy percent of the funds would be met through loans, he said.

Both OMC and OHPC will provide Rs1,200 crore each to start the project making it the second state-owned thermal power unit.

The first thermal power plant at Ib valley was being operated in a joint venture between the Orissa Power Generation Corp. (OPGC) and the US-based Aes Powers.

Patro said the government had already identified land and “the water requirement of the proposed thermal power plant will be met by the reservoir at Rengali”, the exact location where the plant would come up in Angul.

The coal blocks posessed by OMC and OHPC would be utilised in the thermal power project, the minister added.

Business Standard reports the location to be near Rengali dam. Following are some excerpts.

The Orissa Thermal Power Corporation Ltd. (OTPCL), a joint venture between the state owned Orissa Mining Corporation (OMC) and the Orissa Hydro Power Corporation (OHPC), has decided to set up a 2000 Mw thermal power plant at Rengali in Angul district.

Estimated Rs 8000 crore is proposed to be invested in the project and it is likely to be commissioned by 2014.While OTPCL will have a 30 percent equity in this project and the remaining 70 percent will be mobilised as loans. This was decided at a high level meeting chaired by the state energy minister Surya Narayan Patro here today.

OHPC and OMC had started a joint survey for selecting a suitable location for the project since July 2008. Finally, Rengali in the Angul district was found suitable as 1000 acres of government land was available there. Besdies, the area is scarcely populated.

Auctioning of minerals is the way to go?

Chromite, Iron Ore, MINES and MINERALS, Odisha govt. action, OMC, Value Addition Comments Off on Auctioning of minerals is the way to go?

The following excerpts from a news item from illustrates the difference between the state’s income due to only royalties and through auction.

In 2002 the IDCOL made an abortive attempt to give away the mines to Jindal Stainless at a throw away considerations ignoring higher bids by Tata Steel and Visa Industries.

The ill-conceived move by the bureaucrats was foiled by the Orissa High Court, which passed adverse comments regarding the Government of Orissa attempt to compromise public interest in the deal.

Both the State Government and IDCOL appealed before the apex court to get relief with considerable cost and time.

Supreme Court’s order for re-bidding how ever has now materialized.

To the amazement of every one Jindal Stainless which had offered a sum of Rs.38 per ton has now come up with a bid of Rs.3000 per ton for ore having 48 per cent chromium.

And on average they have offered per ton Rs.900.

Visa Industries has out bid Jindal Stainless with an offer of Rs.7000 per ton of chrome having 48 per cent of chromium content.

Even assuming the changes in the commodity prices which have taken place in last 5 years is too much than the price offered earlier.

The colossal loss to the flagship Public Sector Undertaking (PSU), IDCOL can be well imagined if the Jindal Stainless had succeeded in 2002.

Now with opening the financial bids of the participants, it underscores the point that the State Government’s Policy for leasing out the mineral resources of the state is faulty and not at all in the best interest of the state, said a financial analyst.

To take the advantage of high price in demand of metals and minerals in the international market, corporate giants and multinationals like POSCO, Arcelor- Mittal, Essar, Vedanta, Jindal, Bhusan and many others are flocking to Orissa to corner mining leases.

The State Government  … Yet they do not learn from the Tangarpada experience.

Under the MMDR Act, mines can be reserved for the PSUs and leased out to the State owned companies like IDCOL and OMC.

These PSU can auction the mines among the credible parties after floating world tender for value addition and derive bonanza.

Till date no body knows about the “Policy of Value Addition” of the Government of Orissa.

The Policy should come up immediately and it should be implemented in letter and spirit for the interest of the state.

The positive changes of Policy will not effect industrialization, but it will give substantially higher rate of revenue to the state exchequer as demonstrated in case of Tangarpada.

The state’s entire requirement of funds for eradicating poverty and developing the state can be generated with the policy change, said a former Union Minister.

However there is no effort in this direction.

…  Instead of Centre bashing the State Government should make efforts to maximize revenue from mineral resources through PSU mode, observed a former Secretary of the Government of India.

Definitely the state can earn much more on just the minerals by leasing it to state companies like OMC and IDCOL and then letting those companies auction the mineral. The possible negative of completely following that approach, especially with respect to iron ore, is that the winner of the auction can then take the ore and set up plants in other states. If that happens Orissa will lose out on the side developments associated with plants such as infrastructure building, jobs and the tax that the state can get from the companies.

What the state should do is to try for the best of both worlds. I.e., offer other facilities and enticements to keep the companies in the state but go the route of auction. What other facilities and enticements can the state offer?  Orissa being on the coast, availability of ports nearby is an important factor and it is good that the state is working on the development of many ports and railway lines to those ports. Easy availability of land for the companies will help. More thoughts need to be put in this direction.

There is a chance that some companies will not set up shop in Orissa under these conditions; but these days there seems to be a lot of companies who want to set shop. So perhaps the time has come for the state to change its approach of leasing mines to attract companies to auctioning minerals via IDCOL and OMC and using other methods to attract value addition companies.

Mittals would like to tie up with Orissa Mining Corp. : TOI

Arcelor Mittal, Iron Ore, Keonjhar, OMC, Steel Comments Off on Mittals would like to tie up with Orissa Mining Corp. : TOI

Following is an excerpt from a report in Times of India about this.

… “We have received a proposal from Arcelor-Mittal, requesting for an arrangement with OMC,” confirmed a senior officer. “The government is exploring the possibilities and details remain to be worked out. It could mean a long term agreement or a joint venture between the two parties,” the officer told TOI. The government, sources said, has set up a four-member committee headed by chief secretary to examine the proposal’s feasibility and chalk out the draft terms and conditions.

Sources said Arcelor-Mittal is yet to submit any application for prospecting lease or mining lease for any iron ore deposits, but evidently does not want to take chances. Hence, it has proposed a tie-up with the state-owned body to serve as a back-up. “The company would no doubt go for captive mines. The pact with OMC would ensure an alternative raw material arrangement for the company’s project,” sources pointed out. Orissa has so far inked pacts for 46 steel facilities, sparking doubts over iron ore scarcity in future.

Arcelor-Mittal, which has signed an MoU with the state government to set up a 12 MTPA steel plant at an investment of Rs 40,000 crore, is the first major player to make this kind of a proposal. Some small steel units had earlier sought to enter into raw material supply agreements with OMC, apparently to ensure a steady flow of iron ore and offset price fluctuations. Some steel plants, which have reached production stage, are buying ore from the market at higher prices, sources disclosed.

Allocation of Orissa coal blocks

Coal, OMC, Thermal Comments Off on Allocation of Orissa coal blocks

Following are excerpts on this from a report in Pioneer.

The Centre has allocated coal blocks to three companies of the State. These three companies include Orissa Power Generation Corporation (OPGC), Orissa Hydo Power Corporation (OHPC) and Orissa Mining Corporation (OMC). …

In Baitarani West Coal block, Centre has given the rights of exploration to OHPC, State Electricity Board of Kerala and Power Corporation of Gujurat. All of them have been allotted coal blocks to the tune of 200 million tonne. OPGC has got two coal blocks. It has got the Manoharpur and Manoharpur deep side coal block. It has got 532 million tonne of coals.

In the Utkal D- Coal block site, OMC has got 120 million tonne. It has also got 350 million tonne of coal blocks in the Telisahi coal block of Nuagaon.

Andhra Pradesh has also got the 350 million tonne of coal from this site. Mandakini Coal block has been distributed among the four States. Meghalaya and Assam are the important beneficiaries.

OMC’s turnover in Q1

MINES and MINERALS, OMC, State Public Sectors Comments Off on OMC’s turnover in Q1

The Statesman reports on OMC’s turnover in Quarter 1. Following are some excerpts.

The Quarter-I (Q-1) turnover of Orissa Mining Corporation (OMC) during 2007-08 has reached Rs 332.04 crore, which shows a rise of 68 per cent, compared to the corresponding period of the previous year. In the corresponding period of last fiscal 2006-07, it was Rs 197.62 crore.
In the last fiscal, during 2006-07, the corporationís turnover had crossed the four figure mark and pegged at a record of Rs 1,080 crore, with a profit of Rs 540 crore.

… The Q-1 turnovers of 2005-06 and 2004-05 were Rs 124.47 crore and Rs 117.61 crore respectively.