JSW emerges major buyer of Goan iron ore

JSW Steel has intensified the procurement of low-grade iron ore to feed its starved steel plant at Dolvi in Maharashtra.

Last week, it bought 147,000 tonnes worth Rs 24 crore in the fifth round of e-auction by the Goa government. In the previous three auctions, the company had bought 11,000 tonnes.

"For every auction, we assess the quality and usability to take a final decision on our participation in the e-auctions conducted in Goa. Ore purchased in Goa will primarily be used for the plant," said Seshagiri Rao, joint managing director.

The Goa government conducted the first auction between August 21 and 23 after lowering the earnest money deposit to Rs 25 lakh for every 1,000 tonnes of bid instead of Rs 2.5 crore for a minimum 10,000 tonnes earlier. Bids were conducted for 2.14 million tonnes (mt) of low-grade ore, of which 1.91 mt were sold. Bids for 39,000 tonnes were rejected. As much as 185,765 tonnes remained unsold.

Of 15 mt held up after mining was suspended on recommendations of the M B Shah committee, the state government has auctioned 3 mt. The next auction of 2.18 mt will be on September 2.

Steel makers remained shy of participating in the e-auction.

Low-grade ore cannot be directly used for steel making. It is blended with high-grade ore to make it usable. JSW Steel will blend the Goan ore with high-grade one, procured from other sources at its Dorby plant.

"The transportation is a major issue for low-grade ore. To obtain one tonne, we require at least two tonnes, which makes the purchase unviable. So the participation in bids will depend on the quality and usability," Rao said.