After winning Nuagaon mines, JSW Steel has won Narayanposhi iron ore mine block in Odisha under the ongoing auctions of the leases that are due to expire in 31 Mar’20.
According to sources, after witnessing an aggressive bidding amongst the technically qualified bidders, JSW Steel emerged as ‘preferred bidder’ at a premium of 98.55%.
As per sources, five companies namely – JSW Steel Limited, KJS, ArcelorMittal India Pvt Ltd, Rungta and JSPL had qualified the technical round of Narayanposhi mine. The mine fetched highest premium of 72% in the technical round, following which the govt started the 2nd round of auctions. Notably, the highest initial price offer amongst the technically qualified bidders was set as the floor price for the second round of auction.
What does the premium of 98.55% mean? The ‘final price offer’ submitted is a percentage of value of mineral despatched for the mine block and is calculated as a product of mineral despatched in a month and sale price of the mineral (grade-wise and state-wise) as published by Indian Bureau of Mines for such month of despatch. It is to be noted that in accordance with the ‘final price offer’ shall be required to be paid monthly in addition to the payment of royalty or dead rent, as applicable.
A.M.T.C. (P) Ltd was the existing lessee of Narayanposhi iron ore mine block. The mine has an EC limit of 6 MnT pa and has exploration done upto G2 level. The mine has total geological resource of 190.6 MnT iron ore and 0.486 MnT Mn ore. Production of iron ore from the mines was recorded at around 2.99 MnT in FY’19 and 3.328 MnT in FY20 (till Nov’19).
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