OMDC to set up two iron ore processing plants

Orissa Minerals Development Company (OMDC), the state-owned Kolkata-based mining company, has decided to invest Rs800 crore in setting up iron ore pelletisation and beneficiation plants to convert iron ore fines lying as waste into usable raw material for the steel industry, Dalip Singh, joint secretary at the steel ministry, who sits on the board of OMDC, told DNA Money.

OMDC would invest Rs400 crore each in setting up one pelletisation plant and one beneficiation plant of two million tonne capacity each, which will help the iron ore mining company generate revenues at a time when all its mining leases have lapsed, Singh said after the board meeting of the company.
He said the funds for the projects would come from own cash generation. “OMDC doesn’t have issues about funds as it has about Rs1,400 crore of cash.”

All iron ore mining operations of OMDC have come to a halt with the lapse of mining leases in October for the only two mines that the state-run company has been operating.

“With spiralling of iron ore prices, companies are being forced to look at beneficiation and pelletisation. Also, mining companies were earlier supposed to utilise iron ores only above 55% iron content, the rest was considered as waste. This has resulted into huge dumps of iron ore fines lying unused with mining companies including OMDC. We need to utilise this asset for which the board today approved these projects,” he said.

OMDC has mining leases at Barbil in Orissa having reserves of about 206 million tonne (mt) of iron ore and 44 mt of manganese ore, spread across six mines but it has only been operating two mines, Bhadrasai and Bagiaburu, whose lease period and forest clearance lapsed last year.

“None of the mines are operating now, but process of renewing approvals are progressing fast with at least one mine, Kolha-Roida, expected to start operations soon,” Singh said.
In January this year, OMDC invited bids from prospective contractors to mine and transport iron ore from the Kolha-Roida mine, which is one of the biggest mines under the company’s portfolio. The mine is spread across an area of 255 hectares and is rich in iron ore reserves with some reserves of manganese ore, too.

On OMDC’s state of affairs, Singh said, “Operations suffered due to several factors. The company failed to apply for renewal of leases on time; we got a full-time chairman cum managing director only one-and-a-half years back. When things started moving after that, the issue of restructuring of the Bird group cropped up.”

The Cabinet in September 2009 approved the restructuring scheme of OMDC and its group companies including a proposal to transfer 51% in OMDC’s holding company, Eastern Investments Ltd, to Rashtriya Ispat Nigam Ltd.