Intense bidding expected for next phase of Odisha's iron ore auctions

Pellet makers, sponge iron and pig iron producers allowed to participate

The ensuing phase of iron ore mining block auctions in Odisha are likely to see intense bidding, with producers of pellets, sponge iron and pig iron competing alongside steel companies.

The Notice Inviting Ten­d­ers and issue of tender docum­ents are scheduled on October 4 and 14. The bidding has been scheduled for November 18 and 28. Letters of intent to the preferred bidders are expected to be issued by January. Odisha (the state sees the largest production of iron ore in the country) has hitherto put three iron ore blocks to online auction, namely, Ghora­burhani-Sagasahi, Kala­mang West and Netrabandh Pahar. All three went to steel producers — Essar Steel, Bhushan Steel (now Tata Steel BSL) and Bhushan Steel & Power. Since  steel plants were listed as end-use for these three deposits, secondary steel makers were not eligible.

Of late, however, taking a cue from Karnataka, the government of Odisha has decided to allow secondary steel producers to also bid for ore blocks. About half of Odisha's steel comes from the secondary route. “(Also) Permit­ting pellet makers and sponge iron producers will bring more competitiveness to our iron ore online  auctions,” said a government official.

The state steel and mines dep­artment has decided to ha­sten the auctions process after a recent go-ahead from the Union mines ministry on exp­anding the lease area limit to 58 sq km, up from the 10 sq km earlier prescribed. The Ce­n­­tre had advised the state to ke­ep auctions on hold till a decision on enhancing the area limit.

The earlier wrangle over mine lease area limits had throttled auctions in Odisha. Not a single mineral block could be auctioned in the state in 2018-19, due to litigation on the issue. The high court of Delhi had stalled auctions till clarity emerged on eligibility for acquiring an additional mine by a lessee which already held in excess of 10 sq km.

In the next phase, the state is offering  a host of iron ore blocks simultaneously for auction. As many as 20 iron and manganese ore blocks — a mix of merchant leases lapsing by March 31, 2020, and freehold blocks — will be on offer.