e-auction route paying dividends to state-owned miners

Public sector mining companies are securing higher price for iron ore through e-auctions as compared to futures.

With NMDC iron ore fines priced at Rs 1,783 a tonne after going for a mid-year price increase of Rs 574 a tonne on annual contract prices, it is selling the commodity at Rs 4,020 thorugh mjunction Services, the e-commerce venture between Tata Steel and SAIL, a senior official of a steel company said.

The contract price for iron ore fines was Rs 1200 a tonne in April, 2007. The official said NMDC was selling lumps at Rs 4,770 through the e-auction route as compared with the basic contract price of Rs 3,188, which saw an increase of Rs 547 a tonne in December, 2007 with restrospective effect from October, 2007.

Earlier in April, 2007, the contract price of iron ore lumps was about Rs 2,600. NMDC along with other PSU, Kundermukh Iron Ore Company (KICOL) have sold about four million tonnes of iron ore and pellets through the e-auction route since they opted for this route.

V K Jain, Director (Finance), NMDC, however, said the price difference is because of the fluctuation in the international market.

"We are not into profiteering. The price through the e-auction route may also be lower at one point time than the long-term price," Jain said.

KICOL is also selling pellets at $200 per tonne using the e-auction route of mjunction compared with the market price of $90 only a few months back earlier during the fiscal.