The inflatable had been carrying 140-150 people including women when it began taking on water five hours after setting off from North Africa on Monday, according to 80 survivors who were brought to safety in Italy.
"They don't know how long it was before help arrived. They clung to bits of the dinghy until it fell dark, then a boat arrived and they were rescued," IOM spokesman Flavio Di Giacomo told AFP.
The survivors were later transferred to the British military ship HMS Echo, which is currently operating in the Mediterranean as part of the EU's anti-trafficking Operation Sophia.
With smugglers taking advantage of a spell of good weather and calm seas, more than 10,000 people were rescued from rickety boats off Libya since Sunday alone.
Nearly 77,000 migrants have landed in Italy since January, up 15 percent on the same period in 2016.
The latest deaths increase the toll of people dying attempting the crossing or missing, feared drowned, to nearly 2,100 since the beginning of 2017.
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