MOIL kept prices unchanged of most grades for Q1 FY15. However, prices of few high grade ores have been reduced by up to 7%, and offers of few low grade ores have risen by 10%.
• MOIL kept prices largely unaltered for the Q1 FY15
• Few High grade Manganese ore (Ferro grade) prices decreased from 2.5-7%
• Prices of low grade ore (Silico Manganese grade) have increased by 10%
• Silico Manganese producer’s margin will take a hit
• Other private miners expected to raise their offers for low grade ore
High Grade Ore Prices Decreased
State-owned and India’s largest Manganese ore producer, Manganese Ore India Ltd (MOIL) has reduced prices by 2.5-7% for few high grade Manganese ore. This is because Ferro Manganese manufactures are using imported ore. As INR is on an appreciating trend, most Manganese Alloys producers prefer to use imported Manganese ore. In light of this, MOIL decided to decrease its prices.
Low Grade Ore Prices Increased
MOIL has increased low grade ore as there is a shortage of it in the market. There is a huge demand for low grade ore owing to greater demand for low grade ore which is used in blending with higher grade ore for cost viability. Secondly, import taxes are also high for it.
Mn 25% is now being offered at INR 4,420/MT (USD 74/MT) against INR 4,018/MT (USD 64/MT) in the last quarter. Similarly Mn 30% remain unchanged at INR 7,313/MT (USD 122/MT).
MOIL targets Capacity Expansion
The company has announced plans to invest about INR 1,100 crore on expansion and augmenting its existing mining projects by FY17. Of this, a big chunk of the money is expected to be spent on expansion of the Balaghat & Dongri Buzurg mines, which are envisaged to have 5 lakh tonnes capacity each.
For the just ended fiscal, the company has set a production target of 1.15 MT. By FY17, it is eyeing at having 1.5 MT production capacities.
[su_quote]”We will be spending about INR 30-40 crore on prospecting of the area. It is part of the plan to expand our production capacity to 2.2 MnT by 2020. We hope to secure mining lease in next two years,” remarked an official from MOIL.[/su_quote]
MOIL is the largest producer of manganese in India with a market share of over 50 per cent; already operates 10 mines in Maharashtra & Madhya Pradesh.
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