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Advance e-auction for NMDC's iron ore has started off on a promising note with steel mills lapping up the entire lot of iron ore fines put on auction last month. With the new system coming into place, the public sector miner has increased production of iron ore at two of its mines in Bellary district, giving much needed relief to steel mills.
The first ever advance e-auction, held on March 8, witnessed bidding for close to half a million tonnes of iron ore by large steel mills. Most of the producers including JSW Steel, Kalyani Steel, Mukand, BMM Ispat and Janaki, among others, participated in the auctions.
However, steel mills were not keen to bid for iron ore lumps and some lots remained unsold.
Since the commencement of the advance e-auctions, the iron ore production of NMDC at its Donimalai mines has almost doubled to 450,000 tonnes a month. With this, its monthly iron ore production from Donimalai and Kumaraswamy mines put together has increased to 800,000 tonnes.
"The advance e-auction system has benefited both NMDC and steel mills as it has resulted in faster evacuation of iron ore from their mines in Donimalai. We are also assured of a fixed quantity of iron ore every month and we can bid accordingly," said Vinod Nowal, director and chief executive officer, JSW Steel.
The second advance e-auction, scheduled for April 9, is likely to see bidding for another 430,000 tonnes of iron ore, official sources said.
The Central Empowered Committee (CEC), in January this year, decided to conduct advance e-auction of iron ore produced by NMDC in an attempt to speed up the supply of iron ore to mills. The decision was taken in consultation with the company officials as NMDC had faced problems with the storing of iron ore at its mines at Donimalai in Bellary district of Karnataka. The steel mills had also complained of delay in supply of ore to their mills.
The advance e-auction will help NMDC to evacuate iron ore in a time-bound manner and enable steel mills to get smooth supply of iron ore.
According to modalities worked out by CEC of the Supreme Court, the advance e-auction will be held for the iron ore expected to be available for supply during a period of one month only.
The floor price for the ore auctioned is indicated by NMDC. However, the Monitoring Committee is at liberty to appropriately modify the floor price for the lots, which remain unsold in two or more auctions. The first advance auctions witnessed a floor price of Rs 2,400-2,500 a tonne for iron (Fe) ore fines with 61-64 per cent Fe range. The lumps were priced at Rs 4,500 a tonne.
Meanwhile, seven mining companies under Category A have resumed mining operations and fresh iron ore has started coming in for e-auctions. These mines are producing about 250,000 tonnes every month.
