Country’s 3rd largest iron ore producing state, Karnataka is aggressively offering iron ore via e-auctions. Karnataka’s ore e-auctions received an upsurge of 41% in FY16 against FY15. The total allotted quantity in FY16 was 28.7 MnT, against 20.3 MnT in FY15.
Karnataka has at present around 24 mines in the private sector and 2 mines from the public sector namely NMDC and Mysore Minerals. Both NMDC and private miners had competitively offered their material in the e-auctions.
Let’s see how was Karnataka iron ore e-auctions in FY16 as compared to FY15.
Karnataka iron ore e-auctions in FY16
In FY 16, Karnataka iron ore auctions sold around 28.7 MnT ore in FY16. NMDC sold 12.5 MnT iron ore, while private miners sold 16.1 MnT ore in FY16. The weighted average grade of ore offered was Fe 59.8%.
In addition, removal of FDT (Forest Development Tax) by the government added more profitability to buyers purchasing raw material from Karnataka e-auctions. Current levy of FDT (Forest Development Tax) on mineral purchases from Karnataka e-auctions, would be at the extent of 8% and not 12%, only to those who purchase minerals from state controlled entities like Mysore Minerals.
Karnataka’s iron ore production is likely to be around 25 MnT in FY16 which remained at around 22 MnT in FY15. Demand for Karnataka’s ore will increase in the coming fiscal as Karnataka based steelmakers and sponge manufacturers are more interested in buying Karnataka’s ore as the material is available at much cheaper prices.
Major Buyers in FY16
| Company | Fines | Lumps | Low Grade Fines |
Low Grade Lumps |
Low Grade ROM |
Grand Total |
| JSW Steel | 13.25 | 5.43 | – | – | – | 18.68 |
| BMM Ispat | 18.86 | 0.04 | – | – | 0.36 | 2.29 |
| Janki Corp | 0.49 | 0.10 | – | – | – | 0.59 |
| Minera Steel And Power | 0.54 | – | – | – | 0.54 | |
| RBSSNL | – | – | – | – | 0.49 | 0.49 |
| Others | 2.37 | 3.57 | 0.02 | 0.004 | 0.13 | 6.11 |
| Grand Total | 18.55 | 9.15 | 0.02 | 0.004 | 0.99 | 28.70 |
Quantity in MnT
Source: SteelMint, Karnataka DMG
Karnataka iron ore e-auctions in FY15
Allotment of iron ore via Karnataka iron ore e-auctions received underwhelming response in FY15. Total, 20.3 MnT iron ore was sold, out of which NMDC sold 9.6 MnT and remaining 10.7 MnT was sold by private miners. The weighted average grade of the ore put under e-auction was Fe 59.2%.
Major Buyers in FY15
| Buyers Name | Fines | Lumps | ROM | Low Grade Fines |
Low Grade Lumps |
Low Grade ROM |
Grand Total |
| JSW Steel | 8.56 | 3.09 | 0.01 | – | – | – | 11.66 |
| BMM Ispat | 1.05 | 0.01 | – | 0.004 | – | – | 1.07 |
| Jayaalaxmi Mineral | 0.10 | 0.03 | 0.01 | 0.008 | – | 0.56 | 0.72 |
| MSPL | 0.64 | – | 0.04 | – | – | – | 0.69 |
| Janki Corp | 0.25 | – | 0.12 | 0.004 | – | 0.13 | 0.51 |
| Others | 2.30 | 2.45 | 0.59 | 0.06 | 0.008 | 0.20 | 5.63 |
| Grand Total | 12.94 | 5.59 | 0.78 | 0.07 | 0.008 | 0.90 | 20.30 |
Quantity in MnT
Source: SteelMint, Karnataka DMG
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