Goa e-auction, which will start from 17 Feb, 2014 seems to be a game of big steel mills & miners; small exporters and steel mills may not benefit from this auction.
Directorate of Mines & Geology (DMG) of Goa had extended date for submission for e-auction of Iron ore lying at different jetties, stock yards and mines head to 12 Feb, 2014 which was earlier fixed at 29 Jan, 2014.
According to exporters who have submitted their bids on 29 Jan, 2014 mentioned that merely 6 companies (Sesa Sterlite, Radiant, Salgaocar, Fermento, Bagadiya and one more exporter from Hyderabad) had submitted respective EMD, which was announced by DMG based on quantity.
Looking at weak response DMG had extended time limit for submission of EMD amount to 12 Feb, 2014. Sources close to this matter has reported that big steel companies are also willing to participate in this e-auction despite low grade of Iron ore.
The Supreme Court appointed a three-member monitoring committee to oversee e-auctioning process and said that the proceeds from the sale will be kept in separate fixed deposit account by the Goa Government till the apex court finally decided the matter.
However, the base price will be decided on the basis of Iron ore grades. First auction will be held on 17 Feb, 2014 in 2 parts; one from 10.00 hrs to -12.00 hrs, which is for quantity in small lots and second auction will take place between 2.00 hrs to – 4.00 hrs for bigger quantities.
What do exporters think?
Speaking to few exporters, taking part in this auction highlighted that looking at terms & conditions set by DMG, it looks that either big steel mills or large exporters will only make use of this e-auction. Smaller and merchant exporters will not get a big pie of the ore.
One exporter also mentioned,” There are several stocks lying at different jetties and grade varying from 47-56% Fe (which is indicative grade submitted by the stock owner). DMG has given very small time to get the analysis done. Not many exporters would want to take a risk, when margins are so low.
Another important factor is base price, which may be higher than expected. Auctions will take place every week according to DMG notification.”
Viewing that Sesa Sterlite will benefit most from this auction, he further mentioned.
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