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After MSTC Ltd, Mjunction Services, a 50:50 joint venture between Steel Authority of India Ltd and Tata Steel, has evinced interest in offering e-auction services for sale of key bulk minerals in Odisha, such as iron ore, chrome ore and manganese.
The country's biggest e-commerce company,with online transactions worth Rs 1.6 lakh crore annually, it is ready to provide the e-auction platform for all mining lessees in the state.
It has estimated that electronic sale of iron ore fines (64 per cent iron grade) by state-controlled Odisha Mining Corporation (OMC) can fetch 31 per cent higher price if sold through the electronic route. The average price of 64 per cent Fe grade fines sold by Mjunction via e-auction is Rs 2,619 a tonne, compared with OMC's current sale price of Rs 2,001.
"Mjunction's existing clients have achieved up to 5-12 per cent in price realisation after migrating to online sales. Our experience in dealing with electronic sales has proved that e-auction leads to transparent discovery of prices, cuts disposal time and increases process efficiency. We now want to replicate in Odisha the e-auction models that we have successfully executed with our clients in other states," said a senior official of Mjunction Services.
A transparent and remunerative sale mechanism for iron ore has become imperative for Odisha, as the state is going to play a dominant role in the supply of this key steel-making raw material during 2013-14. Ore production in Karnataka, where some mines have restarted operations following the Supreme Court order, is expected to be 15-16 million tonnes, as the reopened mines are expected to take time to attain full capacity. Ore supply from Goa is almost zero because of the ban on mining there. The Odisha government, however, raised the cap on iron ore production in the state by about 10 per cent to 57 mt for the current year. Last year, the state sold about 50 mt ore in the domestic market.
Though the government has not estimated revenue generation from e-auction, sale of iron ore alone through the electronic route is expected to fetch additional revenue of Rs 400 crore for the government annually.
Recently, Mjunction gave an elaborate presentation on its proposal to roll out e-auction services. Under its proposed model, it would finalise the scope of work and the terms. E-auction of minerals will be conducted as required. Mjunction will upload the e-catalogue, identify potential buyers and register those which fulfill the eligibility criteria.
Operating in the e-commerce domain for 12 years, it had transactions worth Rs 40,737 crore in 2012-13. It has been handling iron ore fines, calibrated lump ore, lumps, manganese ore and dolomite.
Earlier, MSTC Ltd had proposed to provide e-auction services for minerals in Odisha. The hurdles have been nearly cleared for start of online sales of minerals, with Chief Minister Naveen Patnaik giving in-principle approval. The state government is waiting for the decision of the Supreme Court-appointed Central Empowered Committee to enforce e-auction among private mining companies.
