Bhushan Power & Steel: Iron Ore Sourcing Fell Marginally in Dec’19

Bhushan Power & Steel – a major integrated steel maker with a capacity of 3.5 MnT has recorded iron ore sourcing at 0.24 MnT in Dec’19. The sourcing witnessed fall of 5% on monthly basis as against 0.25 MnT in Nov’19.

Sourcing from Rungta mines dropped 47% in Dec’19
Indrani Patnaik stood largest supplier of iron ore for the month of Dec’19 at 92,979 MT, up by 10% as compared to 84,596 MT a month ago.

Essel mining supplies recorded at 84,113 MT, up 30% M-o-M as against 64,762 MT in Nov’19. Essel Mining has increased its offers for iron ore lumps by INR 400/MT and fines by INR 150/MT w.e.f 21st Jan’20.

Rungta Mines supplies dropped down by 47% to 36,393 MT for the month as compared to 68,691 MT in Nov’19.

State owned miner- OMC mines recorded 47% fall in supplies to Bhushan Power to 11,178 MT in Dec’19 as compared to 21,118 MT a month ago.

Iron ore supplies from AMTC, MG Mohanty and MGM Minerals for the month recorded at 6,074 MT, 3,850 MT, and 3,848 MT respectively.

Almost all the miners from Odisha increased iron ore fines and lumps offers in the last one month, fines by around INR 600-700/MT and in lumps around 1,000-1100/MT (Ex-mines). If market sources are to be believed, few major miners have already made aggressive bookings in last months as steel mills were actively restocking material ahead Mar’20 lease expiry. Also few mines are heard to have achieved EC limits for this fiscal. Hence, amid tight material availability miners are raising offers.

Bhushan Power & Steel: Iron Ore Sourcing Dec’19 v/s Nov’19

Source: SteelMint Research
Quantity in MT
Provisional Data
the figures include only rake movement, road movement is excluded

Bhushan Power & Steel NCLAT Case Update
Bhushan Power and Steel is one of the companies undergoing bankruptcy proceedings.

The case still remains pending due to amendments to the Insolvency and Bankruptcy Code (IBC). The Enforcement Directorate (ED) today (22nd Jan’20) said it cannot drop the ongoing investigation against BPSL because the amendment brought in the IBC does not applies to the new promoter of BPSL i.e JSW Steel.

The government had amended the IBC last month and inserted Section 32A. According to the amendments made, once the management of debt ridden company changes after Corporate Insolvency Resolution Process (CIRP), it would not be liable for any offences committed prior to the commencement of the insolvency resolution process. But, as per ED the newly inserted section is not applicable to BPSL-JSW deal because the acquisition was approved last year before the amendment came into force.

BPSL Lenders moved to apex court on two grounds. They wanted JSW to implement the resolution plan and the Enforcement Directorate (ED) to reverse an order attaching assets of BPSL.

The Enforcement Directorate (ED) had sought legal opinion to challenge in the Supreme Court the National Company Law Appellate Tribunal (NCLAT)’s order asking it to return the Bhushan Power and Steel’s INR 4,025 crore worth of properties it attached recently. However, ED told to NCLAT that doing so will require amendment in Prevention of Money Laundering Act (PMLA).

Also, the National Company Law Appellate Tribunal (NCLAT) on 14th Oct put JSW Steels INR 19,700 crore payment to acquire Bhushan Power and Steel (BPSL) on hold. Prior to this, JSW Steel moved to NCLAT seeking immunity to the corporate debtor from all civil and criminal liabilities, in the context of banking frauds against BPSL.