Odisha’s state-owned miner- Odisha Mining Corporation (OMC) had scheduled iron ore e-auction today (1st Oct’20) for 668,000 t iron ore lumps. The auction received overwhelming response with entire quantity being booked with hike in bids upto INR 1,850/t. Few sources, indicated that bids received in OMC auction are in line with current market offers. The miner had increased the base price by upto INR 800/t against last auction’s base price held in end-Jul’20.
OMC iron ore auction snapshot – 01 Oct’20
Key market updates:
- OMC is one of the largest merchant iron ore producers in the state of Odisha, which is functional, with an annual production of over 12 mnt pa.
- With resumption in production from OMC Gandhamardhan B block (EC limit 9 mn t pa) and commencement of operations at Tiring Pahar (EC limit 0.328 mn t pa), production volumes by miner are likely to pick up in the coming months.
- Odisha government auctioned 19 merchant iron ore mines before Mar’20. These 19 mines produced around 71 mnt in FY20. 14 mines out of 19 mines have not started production.
- The Odisha government’s Directorate of Mines has shot off show cause notices to new lessees who have fallen foul and are not being able to ensure the minimum requirement of 80% despatches of the “average of the annual production of two immediately preceding years”.
- Odisha govt has granted a month’s relief to ex-lessees to clear out iron ore stocks till 31 Oct’20.
- SteelMint’s Odisha iron ore index towards closing of last week stood at – 5-18mm (Fe 63%) at INR 6,200-6,300/t; 10-30 mm (Fe 63%) at INR 5,900-6,000/t and that for fines (Fe 63%) at INR 3,600-3,900/t ex-mines, including royalty, DMF & NMET.
- SteelMint has learned that Serajjudin which retained the 15.5 mnt capacity Balda iron ore mine and Debabrata Behera who bagged the Silijora-Kalimati iron ore and manganese mine have assured the state that they would be starting work soon. Resumption of mining operations may ease out tight availability to some extent.
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