Taking advantage of the spike in iron ore prices, trading company MMTC Ltd has invited tenders to select overseas buyers of the commodity. Iron ore prices are on a bull run, escalating to a 30-month high of USD 92/MT. The demand for iron ore has shot up from Chinese steel mills despite the rise in inventory of the ore.
“Iron ore exports from the country look profitable at this stage given the record prices. But, volatility of trade will be a factor to watch out”, said an official with a leading standalone mining company.
MMTC has set certain terms for selection of the overseas buyers or traders. The applicant needs to have a minimum net worth of USD 10 million on the closing date of the last financial year. Besides, the average revenue of the company during the last three financial years should not be less than USD 100 million.
The empaneled buyer who submits the highest bid will be selected as the successful bidder. At the time of submitting the price bid, the bidders need to submit an EMD (earnest money deposit). Value of the EMD would be up to one per cent of the shipment value and the same would be delivered on the basis of the then prevailing iron ore prices of the grade for which the bids would be invited.
While EMDs of unsuccessful bidder would be returned within one week from the date of opening of price bids, the EMD of the successful bidder would be returned immediately on the receipt of the prescribed performance guarantee. MMTC’s wholly owned subsidiary would be exempted from submission of the performance guarantee.
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