Goa govt relaxes norms for iron ore auction

Lowers EMD for auction, reduces lot size by 90% to accommodate more players and intensify competition

The government of Goa has lowered the earnest money deposit and lot size by 90 per cent for iron ore auctions, to accommodate more entities and promote competition.

It has cut the minimum deposit till now of Rs 2.5 crore for 10,000 tonnes of ore auction to Rs 25 lakh of deposits for 1,000 tonnes. Interested participants, however, can deposit in multiples of the amount; on a Rs 10 crore deposit, they can bid for any quantity.

“The modification is meant to accommodate small sponge iron players. Now, they will be able to participate in the bid, which will increase competition,” said a senior official of a leading iron ore miner and exporter in the state.

Since the mining ban in Goa around 18 months earlier, the state government has so far auctioned 2.2 million tonnes of ore of the 11.48 mt stock. Beginning February this year, it has conducted three rounds of auctions. However, only the first got a high response.

“Iron ore exporters from Goa have lost their niche position to remain a long-term supplier of the steel making raw material, due to the mining ban. The freshentry into the export market will be treated as a new entrant. Iron ore export from the state looks impossible,” said the official.

The government, mining companies and dependents want iron ore exploration to resume at the earliest. The government has assured a revised mineral policy soon.“The government is worried over the response (to auctions). At the current price, export is not feasible, especially with 30 per cent duty. Hence, iron ore auctioned in Goa would be sold for local players only,” said Haresh Melwani, chief executive officer of HL Nathurmal & Co, an iron ore miner and exporter.

According to sources, 3.7 mt of ore auction in the fourth round is scheduled on August 18. Another two mt is likely to be sold in the fifth round, scheduled in the last week of this month.