In an attempt to speed up supply of iron ore to steel mills, the central empowered committee (CEC) has decided to conduct advance e-auction of iron ore produced by state-run miner NMDC Ltd. The CEC, in consultation with company officials, has finalised a detailed structure for advance e-auction, which will come into effect from March 8.
The advance e-auction will help NMDC evacuate iron ore in a time-bound manner and enable steel mills to get smooth supply of the raw material. At a meeting held on January 29, CEC decided to hold advance e-auction for the iron ore produced from NMDC’s Donimalai mines in Bellary district, Karnataka.
The advance e-auction will be held for the iron ore expected to be available for supply during the period of one month.
According to the modalities worked out by CEC, for each week of the advance e-auction, the lot numbers that are likely to be available for supply will be intimated by NMDC to the monitoring committee and details thereof will be included in the advance e-auction notice.
The floor prices will be indicated by NMDC. However, the monitoring committee will be at liberty to appropriately modify the floor price for the lots, which remain unsold in two or more auctions.
The committee will prescribe appropriate terms and conditions, including payment and delivery schedules and quantity verification process.
“The successful bidders will be required to make full payment of the lots purchased by them at least seven days before the start of the week in which the delivery is due to be made except for the first week when the payment will have to be made four days before the week in which the delivery is to be made,” M K Jiwrajka, member secretary, CEC, said.
In the advance e-auction notice, the lot-wise details of the indicative grade, quantity, moisture content, percentage of under-size lumps, etc will be provided along with the base prices for iron ore of various grades with an interval of 0.1 per cent Fe variation. The sale price payable by the buyer will be equal to the floor price of the grade of the iron ore supplied plus an amount equal to the percentage by which the sale price offered for the indicative grade is above the floor price of the indicative grade.
The permissible moisture content will be between four and six per cent in case of lumps and six and eight per cent for fines. Whenever the buyer purchases more than one lot in the advance e-auction, the amount payable by the buyer will be based on the weighted average of all the lots purchased by him.
