The Orissa Mineral Development Company (OMDC)
The Bird Group of Companies (BGC), before restructuring, was having 5 companies namely- (1) Eastern Investment Limited (EIL), (2) Orissa Mineral Development Company (OMDC), (3) Bisra Stone Lime Company (BSLC), (4) Karnpura Development Company Ltd (KDCL), (5) Scott & Sexby Ltd (SSL), under administrative control of the Ministry of Steel, Government of India. EIL is an investment company and its main investment is in OMDC and BSLC, which are mining companies having interest in iron/ Manganese and limestone/dolomite respectively. KDCL was mining limestone and SSL was interested in survey and drilling bore wells. Out of the five, only OMDC and EIL were profit making companies and the rest three were loss making and their net worth got almost eroded. Consequently, Government of India decided in September 2009 to restructure the BGC by winding up SSL and KDCL and adjusting their employees in OMDC. Government loan to BSLC was to be converted into equity and interest on loan was to be waived off. EIL was to be made a holding company of the OMDC and BSLC by transferring all government shares in OMDC and 50% of BSLC shares to EIL and equivalent value shares of EIL to government. Thus Government was to have 66.79% shares of EIL to have more than 50% shares in OMDC and BSLC to make it a government company & PSU. The EIL was to have more than 50% shares in OMDC & BSLC to make them subsidiaries of EIL, and thereby making them PSU under section 617 of the Companies Act. RINL was to buy 51% EIL shares from the government of India to make BGC a subsidiary of the RINL.
2) On 29’’ October 2009 Dr. Satish Chandra joined as MD of the BGC and subsequently become CMD on 1.12.2009. His main task was to complete the restructuring of the BGC and revive the BGC. An aggressive management strategy of Dr. Chandra, active cooperation of BGC Board and the Ministry of Steel, helped BGC to complete the restructuring within a record time of less then 6 months &on 19’’ March 2010, EIL, OMDC and BSCL became central PSUs. KDCL and SSL were wound up by the order of Kolkata High Court and about 130 employees of both the said companies were adjusted in OMDC. NOW RINL has purchased 51% shares of the EIL for Rs 362 Crs and consequently RINL CMD has become ex-offico non-functional Chairman of the BGC, and each BGC company is having one RINL nominee director in their respective Board, consequent to BGC becoming subsidiary of the RINL, Dr. Satich Chandra has been designated as MD of all the three companies of the BGC. Most of the time 51% EIL shares purchased by RINL is misunderstood as a merger of BGC with RINL. In the case of merger identity of the company is lost and becomes the identity with which it is merged. Thus the present case is not a merger, but acquisition of major shares by one Government company to another Government company since all the three companies of BGC are listed companies; all transactions are at arms length. RINL has to buy Iron & Manganese ore from OMDC & Limestone & Dolomite from BSLC at a market price. Thus, interested shareholders will remain productive.
3) Ministry of Steel, considered a proposal to make EIL and OMDC a schedule A Miniratna companies and schedule B status to BSLC. Accordingly, Steel Ministry sent a proposal to Department of Public Enterprises (DPE) Ministry of Heavy Industry, Government of India, which is now going to classify OMDC as Schedule B and BSLC as Schedule C company on being subsidiary of RINL, which is a Schedule A company. No classification will be done for ELI being a cell company.
4) OMDC is operating 6 mining leases of Iron and Manganese ore mines in Barbil, District Keonjhar, Orissa. At present all the mines are inoperative due to their closer on account of non-availability of forest and environment clearance. Now kolha Roida mines having 3 million tones annual capacity of iron and 2.4 lakh tones of manganese may start production some time in November/ December 2011, as it may get final environment clearance very soon on completion of its presentation before Environment Expert Committee On 21st June 2011, MOEF, GOI. Similarly Dalki mines may also come in production by December, 2011 as it may also get environment clearance some time in August/ September 2011.
5) Public hearing for environment clearance for all the mines have been completed, now the case is under consideration of the Ministry of Environment & Forests, Government of India. Most of the formalities for forest clearance have been completed for the remaining four mines, i.e., Thankurani, Belkundi, Bagiaburu, Bhadrasahi, which may get 1st stage forest clearance in a couple of months and after that they may get environment clearance, which is contingent on 1st stage forest clearance as per 31st March, 2011 guidelines of MOEF.
6) At present BGC is very weak in human resource, as it has just four officers in E-6 out of the 102 available officers in OMDC and 39 officers in BSLC. Day to day business, at the mines level in both the companies, is being managed through E-4 level officers. Officers and work force have been demoralized due lack of transparency, poor wage structure and poor promotional prospects, besides closer of mines. Now steps have been taken to address these issues by making detailed service and entitlement rules and having transparent promotion policy. Now all the officers having 5 years service in a particular grade have been considered for promotion by the Departmental Promotion Committee ?(DPC). New salary and wages as per the DPE guidelines of 2008 have been approved by the OMDC Board and sent to Ministry for approval in May 2010. Once notification regarding classification of the company is issued, new wage structure may also be approved by the Government. Recruitment drive has been launched to fill the vacancies, particularly in higher grades to strengthen the management. This process may take few months and it may be completed by November/ December 2011. Besdies, two posts of functional Directors in OMDC and one for BSLC may be created and filled in next few months. This will complete the organizational structure of OMDC & BSLC.
7) Real benefits of all the corrective measures taken so far will give desired vield from the next financial years. And OMDC may excel its performance during current financial year as compared to last year and in next financial year it may best all the results so far achieved by the OMDC during its entire corporate life since its incorporation in 1918. Similarly, BSLC may end up the cycle of recurring losses by the end of this financial year and from next year may start posting cash profits if its revival plan is approved and implemented in time.
8) The measures taken for renewal of the mining leases have started vielding desired results. Now one mine-Kolha-Roida is mature for renewal. Dalki may get environment clearance some time in September 2011 and thus be completing all formalities for renewal. It is expected that remaining four mines may complete all the formalities for renewal by end of 2012 and may also come in production. BSLC has planned to increase its production capacity form 1million to 5 million tons of limestone/dolomites per year in next few years. Now. Government of Orissa has been requested to renew the leases of all the six mines, so that company can take immediate decision.
9) BGC will endeavor to do mining through its own resources to develop itself as a well equipped mining company on the line of NMDC. It has planned to achieve production of 10 million tons of iron ore and 1 million tones of manganese. Logistics and marketing will be a big challenge. To address the logistic issues steps are being taken to improve rail and road systems within the mines. Presently OMDC is selling its all products through eauction. It may not be feasible to sell 10 million tons iron ore annually, which is a huge quantity, through e-auction, which basically used by the spot and small buyers. Therefore, long term sale arrangements will be made, besides e-auctions. In long term sale arrangements preference will be given to plants located in Odisha.
10) As per restructuring scheme, OMDC has planned to put up 2million tons benerficiation and 2 million tons pellet plant in Thakurani, Barbil, Odisha. Required formalities for single window clearance from Odisha Government in regard to power, land and water have been completed by the OMDC. The technical feasibility report has been completed by the Dastur and after Board deliberation next steps will be taken. The estimated cost of the beneficiation plant is about Rs. 404 CRs and that of pellet plant is Rs. 774 CRs. It may take three years to complete the project after getting all clearance. On completion of these projects OMDC may have turnover of more than Rs 5000 Cr in 2015-16.
11) Number of measures have been taken to check theft & pilferage by putting dropgates, trenches, barricades & road block. Steps are also being taken to use technology to monitor vehicles & people around & within mines. Electronic weighbridges with digital recording and CCTV will be used to monitor production and unauthorized movements. Currently production will have high priority and it will be monitored on regular basis through improved job facilities.