Odisha Mining Corp to sell 0.8 mn tonne iron ore in first ever e-auction

Auction prices to impact long-term supply pact with steel makers

In its first ever online auction for sale of iron ore, the Odisha Mining Corporation (OMC) has earmarked 417,000 tonne iron ore fines and 365,000 tonne iron ore lumps of different grades to be sold on the auction scheduled for October 27, according tender document of the mining firm. As the company will be selling iron ore through online for the first time, a road show was organised today at Bhubaneswar to generate awareness among interested buyers.

“We have received enquiries from about 30-40 buyers for the online auction of iron ore. We hope more buyers from across the country will participate in coming days,” said an official of MSTC India, which will be conducting the e-auction on behalf of OMC.

Last month, OMC had proposed the state government to sell 50 per cent of iron ore produced by it thorough online auction to end users while the rest of the mineral output are to be provided to companies based on a five-year supply pact. The user industries have signed agreement with the state government and are currently in operation. OMC produced around 2 million tonne iron ore last year.

OMC proposal was in line with the recommendation of a ministerial committee report submitted last year to provide raw material linkage to local industries

The supply pact is expected to benefit Bhushan Steel Ltd, Jindal group, especially Jindal Stainless Ltd (JSL) and Visa Steel which will get iron ore supply assurance from the state-run miner for a period of five years. The prices of the minerals at which long-term supply pact will be signed will depend on the final result of the e-auction. For the upcoming auction, OMC has proposed to sell raw material sourced primarily from Gandhmardana, Daitari and Koira mines on as is where basis including royalty. The base prices of the fines vary from Rs 2,500 to Rs 3,000 per tonne for 62 to 65 grade ore except for low grade ore having 60 per cent iron content which has been set at Rs 1,400 per tonne.

Similarly, for blast furnace grade lumps, the base price is kept between Rs 4,100 to Rs 4,500 a tonne for 64 grade ores while for soft grade lump having 65 per cent iron content, it is Rs 3,600 per tonne.

Sources in OMC declined to comment on the reference price considered for the base rate of iron ore. In case of chrome ore e-auction, OMC relies on export rates obtained by MMTC Ltd for chrome concentrate shipments.

The base prices set by OMC is lower than the prices currently offered by private miners, said a trader.