India: OMC increases iron ore base price for upcoming auction on tight availability

Odisha’s leading miner – Odisha Mining Corp (OMC) has scheduled its next iron ore e-auction on 1st Oct’20. The auction is being conducted for 668,000 t iron ore lump. The miner has increased the base price by upto INR 800/t against last auction’s base price held in end-Jul’20.

The miner has increased the base price of material offered from Daitari mines by INR 650/t. The base price for lumps from Gandhamardan mines increased by INR 600-800/t. For the material put to auction from Koira mines the miner kept the prices stable against the base price in an auction held on 3rd Sep’20.

OMC iron ore e-auction details

Base prices in INR/t on ex-mines basis; including royalty
Source: SteelMint Research

Odisha iron ore prices have continued to increase on limited availability in the merchant market. Odisha holds a 50% share in India’s total iron ore production. After the auction of 19 mining leases, only five of them have started production and the rest are either dormant or about to start producing. 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.

Past auctions of OMC fetched active response
OMC had scheduled iron ore e-auction on 3rd Sep’20 for 492,000 t. The auction received an overwhelming response with the entire quantity being booked along with a hike in bids upto 119%. Prior to it, OMC had scheduled its last iron ore lumps e-auction on 31st July’20. The entire quantity of 600,000 t was booked with bids received above upto INR 500/t over the set base price.

OMC has recorded steady growth in iron ore production over the past years from 6 mn t in FY’16 to 12.4 mn t in FY’20.With resumption in production from its Gandhamardhan B block and commencement of operations at Tiring Pahar, production volumes by miner are likely to pick up in the coming months.