India: Karnataka iron ore e-auction sales rise 14% y-o-y in FY’22

Karnataka’s iron ore e-auction sales volumes rose by 14% y-o-y in FY22. The total allotted iron ore quantity in this year was 33.38 million tonnes (mnt) compared to 29.2 mnt in FY21. A higher number of auctions, on rise in production from mines, resulted in greater allocations of iron ore in the year.

JSW’s iron ore sourcing from Karnataka auctions increases: Purchases by JSW Steel, the largest buyer from Karnataka’s iron ore e-auctions, increased by 9% in FY22. The company purchased around 17.29 mnt of iron ore from the Karnataka auctions in FY22 against 15.92 mnt in FY21.

Out of the total volume, NMDC supplied 7.15 mnt (a significant rise compared to 5.51 mnt in FY21) of iron ore, accounting for around 41% of JSW Steel’s total sourcing.

Vedanta remained the second-largest iron ore supplier to JSW Steel at 4.564 mnt in FY22, moving up against 3.904 mnt in FY21.

Apart from this, JSW Steel also raised production from its ‘C’ category iron ore mines in the state to fulfill its raw material requirement for steelmaking. Notably, JSW Steel’s crude steel production stood at 17.62 mnt in FY22, up by 17% against 15.08 mnt in the preceding fiscal.

Buyer-wise allotted quantities in FY22 iron ore e-auctions

Qty in tonnes (t)
Source: Karnataka state govt, DMG, SteelMint Research
All prices mentioned are basic, taxes extra

Sales from NMDC rise 53% y-o-y: NMDC sold 11.84 mnt of iron ore via the Karnataka e-auctions in FY22 against 7.75 mnt in FY21, (including volumes from the Donimalai mines). NMDC’s Donimalai mines sold around 5.47 mnt in FY22. This was mainly due to higher production from the country’s top iron ore miner NMDC, which saw  its Donimalai mine renewing operations upon payment of additional premium to the state government. Iron ore sales from the other leading miner, Vedanta, were recorded at 6.2 mnt in FY22 against 5.04 mnt in FY21.

Highlights of FY22 Karnataka iron ore e-auctions

• Vedanta procured 1.02 mnt of iron ore, of which 604,000 t were fines (Fe 55.5%-66.2%) and 416,000 t were lump ore (Fe 59.8%-66%).
• Eastern India-based Electrosteel Castings Limited booked 44,000 t of lumps (Fe 63.11-64.88%) from P Balasubba Setty in the Karnataka auctions.
• Gujarat-based SAL Steel procured 28,000 t of fines (Fe 65%) from Vyasankere mines.

Karnataka emerged as the second-largest iron ore producing state of India, with output climbing 18% y-o-y to over 40 mnt from around 34 mnt in FY21.