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Goa is set to hold another round of iron-ore auction on Wednesday, even as that auctioned in February hasn’t been lifted due to procedural hurdles. Mills are unlikely to participate in the second round, in which 1.56 million tonnes (mt) will be auctioned, due to poor quality.
The first round for 545,000 tonnes on February 17 saw participation largely from traders, as they wanted to step into exports after 18 months since the mining ban was imposed in Goa. Before the ban, the state had produced 60 mt.
“Mills stayed away from the first round largely because of inferior quality. The quality is no different this time. Therefore, it is difficult to say if mills will participate again,” said S Shridhar, ex-president of Goa Mineral Ore Exporters Association.
Haresh Melwani, chief executive of H L Nathurmal & Co, a Goa-based iron ore miner and exporter, said the quality was inferior.
Ore purchased is at the venue. So far, buyers have not signed contracts with foreign purchasers due to procedural hurdles. Shridhar said traders would take at least two weeks to execute any exports to China.
Experts said the ore from Goa had eight-nine per cent silica, an impurity that has to be removed with the help of costly raw material coke. The ore mined in Karnataka and Jharkhand had two-three per cent silica. It is said six per cent higher silica content will require two-three per cent more coke, leading to a proportionate increase in the cost of steel production. Mills are bearing high costs for transporting due to the high content of slag and moisture. “India lacks large blast furnaces, in which a high quantity can be blended for steelmaking. All these problems will make manufacturing from Goan ore unviable,” said Melwani.
JSW Steel, which didn’t participate in the first round, is expected to stay away this time, too.
Prakash Duvvuri, head (research & business development, OreTeam, said a low grade, transportation hurdles and the unavailability of rake were some of the issues that might keep steel mills away from the auctions.
Currently, 11.5 mt of iron ore is lying with miners in Goa for auctions. “We have already registered with the Directorate of Mining and Geology, Goa, for participating in the iron ore auction,” said Seshagiri Rao, joint managing director and group chief financial officer, JSW Steel. Earlier, the company had said it would participate in the tender to feed its Dolvi plant in Maharashtra.
