India: Will Govt of Goa continue E-auction for Iron Ore Sale?

Will Directorate of Mines & Geology (Govt of Goa) continue e-auction for Iron ore sale, as the 30% export duty on Iron ore was not withdrawn in Budget 2015-16?

SteelMint learnt that the Govt of Goa is yet to take a call about continuing e-auction for Iron ore sale, which is mostly exported to China because lack of technology restricts India from utilizing the inferior quality Ore as of now.

In contrast to the industry’s anticipations that Budget 2015-16 would scrap the 30% export duty on Iron ore fines (low grade), it remains unaltered.

A senior official of Directorate of Mines & Geology (Govt of Goa) told SteelMint, “We are still in discussions whether we should continue with e-auction for Iron ore sale, looking at fines (Fe 62%) prices which are below USD 60/MT CFR China and low demand from Chinese steel mills. It may take nearly two weeks for us to take a final decision on this subject and see how we could liquidate the accumulated stock.”

The state government had last conducted an Iron ore e-auction on 07 Nov’14 and 10.1 MnT Ore is still to be offered. Chinese Iron ore fines (Fe 62%) prices have been constantly declining since then i.e. from USD 73/MT CNF China in Nov’14 to below USD 60/MT at present.

We think that the next 3 months in case of Goa Iron ore mining industry and exporters supplying Goan Ore to China would be crucial for auctioning/exporting the maximum feasible quantity. Logistical constraints and quality issues during monsoons shall halt dispatches then.

Out of 15 MnT Iron ore stockpile, 5.9 MnT has been offered for sale via 5 e-auctions, which began on 07 Feb’14. Out of the total offered quantity, 4.9 MnT Ore has been allotted to various steel mills/exporters. Until now, exporters have sold 0.7 MnT Iron ore to overseas market.

In Nov’13, the Supreme Court had permitted sale of 15 MnT of Iron ore stockpile that was mined before enforcement of mining ban (Oct’12) in Goa. The raw material was lying at various sites in the state i.e. 10.8 MnT at mines, 4 MnT at jetty and about 0.2 MnT at various ports.