South- West Mining company – a subsidiary of JSW Group has won Bhangaon iron ore mine block at 89% premium.
Department of Mines & Geology (Govt. of Jharkhand) conducted an e-auction to grant one block of Bhangaon Iron Ore mine on lease in West Singhbhum, Jharkhand. Bhangaon iron ore mine extends to 118 hectares with 40.29 MnTof iron ore reserve. Average Fe range for the mines is 58.3%.
According to the sources, the South-West Mining Company – a JSW group company has won the iron ore mines auction at a premium of 89% for 50 years.
Other participants in the block auction were- Tata Steel, Fomento Rungta Mines, Essel Mining & Industries, Vedanta, and MSPL.
As per reports, an auction will fetch INR 11,536 crore from this auction and 14% ad-valorem royalties for the Jharkhand state.
How will JSW Steel be benefitted from this?
JSW Steel reported highest ever annual performance in FY18. Company’s standalone crude steel output was recorded at 16.27 MnT, up 3% Y-o-Y. The company’s iron ore sourcing stood at 33.10 MnT in FY’18, up 11% as against 29.85 MnT in FY’17. In FY18, JSW Steel procured material through Karnataka e-auctions, NMDC (Chhattisgarh), Odisha & Jharkhand mines and through imports.
The company aims to acquire more iron ore blocks. It has already acquired five iron ore mines in Karnataka in Oct’16. It has already started operation at two of its mines and rest three have obtained 1st stage clearances from MoEF and likely to start by H2 FY19. Collectively they will supply 4.3 MnT p.a.
Thus the steelmaker is aggressively looking out to acquire more iron ore mines so as to reduce dependence on merchant market & imports.
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