Odisha’s state-owned miner- Odisha Mining Corporation (OMC) had scheduled its iron ore e-auction on 04th Apr’19. Total quantity put under the auction was 397,000 MT iron ore lumps. The material was from Gandhamardan, Daitari, and Koira mines. Traders were restricted to take part in this auction. The miner had cut base prices decreased by INR 200/MT against the previous e-auction conducted on 01 Feb’19.
The auction fetched good response with 74% material getting booked at base price. The entire quantity offered from Daitari got booked however some quantities from Koira and Gandhamardan remained unsold.
Nearly 79% material offered from Koira mines got booked and around 57% from Gandhamardhan mines. Lumps offered from all the three mines Daitari, Koira and Gandhamardan mines fetched bids at its base price.
SteelMint has learned from the market participants that the reason for good response was lowered rates of 10-30mm offered by OMC against the merchant miners in Odisha.
Major merchant iron ore miner’s decreased offers on bulk quantity purchase of iron ore in April’19. Few merchant miners have decreased offering for iron ore and others may revise soon. SteelMint’s index for Odisha merchant miners for fines (Fe 63%) have come down to around INR -1,900-2,000/MT and 5-18 lumps at INR 4,000-4,100/MT (ex-mines, including Royalty, DMF & NMET).
Base price comparison of OMC iron ore E-auctions-:
| Mines | Size (mm) | Fe (%) | Base Price as on 01 Feb’19 | Bid Price as on 01 Feb’19 | Base Price as on 04 Apr’19 | Bid Price as on 04 Apr’19 | Quantity (MT) | Quantity (MT)Sold |
| Gandhamardan | 10-40 | 62% | 3,050 | 3,050 | 2,850 | 2,850 | 135,000 | 70,000 |
| 10-180 | 65% | 2,350 | 2,350 | 2,150 | 2,150 | 15,000 | 15,000 | |
| Kurmitar (Koira) | 10-40 | 62% | 3,550 | 3,550 | 3,350 | 3,350 | 180,000 | 143,000 |
| Daitari | 10-40 | 62% | 3,450 | 3,600 | 3,250 | 3,250 | 67,000 | 67,000 |
| Total | 397,000 | 295,000 | ||||||
Base prices in INR/MT on ex-mines basis; including royalty
Source: SteelMint Research
State-owned miner – Odisha Mining Corporation (OMC) is all set with iron ore production ramp-up plans for coming years to make up for expected supply disruption after March 2020 following lease expiry. OMC is planning to achieve 20 MnT iron ore output by FY21.
EC limit at Daitari mines is proposed to be increased to 6 MnT p.a. from current EC of 3 MnT pa. On similar lines, EC limit at OMC’s Kurmitar mines is proposed to be increased from current 2.4 MnT pa to 6 MnT pa.
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