Calcutta, June 25: Steel manufacturers buying iron ore from Orissa Mining Corporation Ltd (OMC) are not happy with the pricing policy of the state agency.

In a meeting with Union steel secretary P. K. Rastogi yesterday, steel players alleged that OMC had been fixing ore prices arbitrarily without adhering to the price discovered through a competitive and open tender process.

The Kalinga Nagar Industries Association (KNIA) — a body of 10 steel companies, including Tata Steel and Jindal Stainless — said the pricing policy of OMC was putting a strain on the plants.

“In the last three bids, OMC has not agreed to provide iron ore at the price discovered through the tender process. Instead, it fixed a price which is much higher,” P.K. Kandoi, president of the KNIA, told The Telegraph.

OMC has called for fresh tenders to fix prices for the July-September quarter and it will be opened this Saturday.

“We fear that the same story will be repeated. It is going to be harmful for the industry,” he added.

Iron ore prices globally peaked in the middle of 2008 before the economic slowdown began in October. Since then, spot prices of steel have halved, while iron ore prices plunged in tandem.

Though the tender rates reflected the global trend (see chart), OMC fixed the price around 44 per cent higher in October-December. For the January-March and April-June quarters, the prices were 87 per cent and 20 per cent higher, respectively. When contacted, senior OMC officials refused to comment.

Unlike in Kalinganagar, OMC is selling at a much lower price in Barbil where private mines are operational.