First E-auction by Goa government has fixed base price on export parity basis. Approximately 10 to 12 participants have registered.Trade sources feel Sesa Sterlite will benefit from this auction
Speaking to a senior official at Goa Directorate Mines and Geology (DMG), base price for first ever e-auction of Iron Ore in Goa has been fixed based on Export parity, following the Supreme Court (SC) banned mining and exports in September 2012. Only about 0.53 MnT is being put up for sale. Official confirmed that prices have been fixed based on Export parity considering Platts Index as on 13th February 2014.
According to a document reviewed by SteelMint, following conditions have been fixed for sale of iron ore to be auctioned in two sessions on 17th February 2014, based on lot sizes.
Conditions
- Discounting for moisture content is done to the extent of 10% for 58
grade ore and 12% for 52 grade ore and accordingly the FOB price - The price for same grade of ore will differ depending upon its location. For example the ore at jetty will have lower base price than the ore of same grade at MPT because of the additional cost required for carriage of the ore till MPT.
- Base price is fixed on Wet Metric Tonne (WMT) basis.
- The successful bidder in addition to payment of the bid price will also have to pay Government of Goa service charge of .02% along with service tax payable to MSTC.
- He is also liable to pay 10% Royalty on the sale price, 5% non refundable VAT on sale price and royalty.
- 20 rupees per tonne processing fee under Goa Illegal mining storage and transportation Rules 2013, Green Cess at rate of 20 rupees per ton. In case of export the export duty as applicable will also have to be paid.
Base Price for Fe 55% iron fines have been fixed at INR 1,820/MT, if lying at MPT and INR 1,520/MT if lying at jetty. Most of the lot available for sale has an average iron content varying from 52-54% Fe.
What do Exporters say?
Speaking to exporters taking part in this E-auction highlighted that, it will be tough for exporters as sampling done last week showed a mixed results. They also mentioned that miners owning these lots expected to bid highest as they know the proper specification. Speaking on the base prices, most of them are happy as it is based on Export parity basis.
It will be interesting to see, will this E-auction attract aggressive bids from domestic steel millers?
Complete list of Iron Ore to be Auctioned on 17th February 2014.
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