State-owned mining entity Odisha Mining Corporation (OMC) is gearing up to hold its first ever national e-auctions for bauxite. The auctions are expected to be conducted on the MSTC platform in April.
OMC has started mining activity at Kodingamali lease. Bauxite extracted from this mine would be offered for auctions. Preference would be given to end use industries at the auctions. The surplus stock left after meeting the requirement of such industries could be offered to traders. OMC is yet to take a call on the quantum of bauxite to be offered at auctions.
The mining PSU would offer 30 per cent of its saleable bauxite stock at auctions.
The balance 70 per cent is earmarked for long-term linkage as per the terms set in the bauxite linkage policy approved recently by the Odisha Cabinet.
OMC has invited notice from applicants for registration to participate at the national auctions for bauxite. The deadline for registration is March 23.
For long-term linkage (LTL), OMC has floated an Expression of Interest (EoI) for long-term linkage pacts with eligible state based end user industries for buying bauxite.
The weighted average price derived from the national e-auction would be the LTL price. The floor price for the national e-auction would be kept at cost of production plus profit margin of 50 per cent. The LTL provision is set to primarily benefit Vedanta as other aluminium players- Hindalco Industries and navratna PSU National Aluminium Company Ltd (Nalco) are already fed by captive supplies.
Earlier, the Odisha government had constituted a committee under the chairmanship of the state chief secretary to make appropriate recommendations on the nature and detailed modalities for supply of bauxite ore by the OMC to the Lanjigarh alumina refinery as and when any bauxite mining leases are operated by OMC.
At the national e-auctions, OMC would directly deal with the end-user industries. Participation by the traders would be considered only if there is lack of adequate response from the end-user industries.
Though Odisha has bauxite reserves of 1968.86 million tonnes, annual production is only 9.2 million tonnes.
The state government has decided that more bauxite blocks would be explored through outsourcing by the steel & mines department. OMC would explore the statutory clearances for the blocks assigned to it. If progress of the blocks is not found to be satisfactory, they can be surrendered and auctioned for PL (prospective license) cum ML (mining lease) by the state government.
A part of the Karlapat area, excluding the ML area granted to OMC, would be de-reserved and auctioned for composite license (PL cum ML) for speedy exploitation of bauxite to ensure revenues for the government.