State-controlled miner OMC, has recently conducted an e-auction for 405,000 MT iron ore (304,000 MT CLO & 101,000 MT fines) on 26 Feb’16. The company sold 65% of the offered quantity i.e. 264,000 MT mainly from Koira and Daitari mines.
Koira mines, from which majority of the material was offered i.e. 200,000 MT CLO & 50,000 MT fines. Out of the total, 182,000 MT CLO was sold and fines lot remained unsold. Secondly, if we talk about Daitari mines, out of the total quantity offered i.e. 139,000 MT, only 82,000 MT (10-40 mm) lumps was sold, rest fines remained unsold.
According to market sources, the company will soon conduct an e-auction for Gandhamardan mines by 1st week of March. And, they are yet to decide about re-conduction of auction for leftover quantity.
The material sold has been procured by mainly sponge based manufacturers. Also, the material has been sold at base prices itself which the company kept almost unchanged for this e-auction. Recently, the company has also issued the duely payable DMF amount by the buyers, because of which there was less participation seen in the e-auction.
Odisha govt. notifies collection of DMF
Directorate of Mines, Odisha govt. has issued a notification on 24 Feb’16 regarding collection of District Mineral Foundation Funds (DMF).
In regards to DMF collection, OMC has issued few payable dues for DMF collection. The DMF contribution will be collected at 30% of royalty (in case of mining leases granted before 12 Jan’15) and at 10% of royalty (in case the mining leases are granted after 12 Jan’15).
The company is planning to collect the respective DMF amount from the period between 15 Jan’15 to 31 Jan’15 from the buyers itself. However, from Jan’16 onwards the company will pay the respective DMF amount.
OMC plans to ramp up iron ore production
However, in recent reports, the miner have asked to fast track their production in an effort to streamline raw material supply to local industry. The company aims to produce 6.55 MnT iron ore by the end of FY16 and plans to increase it to 10 MnT in FY17. For this, the company is planning to increase ore production at its key iron ore mines namely Koira and Gandhamardan in a mechanized format However, by far in FY16 (till Jan’16), the company produced 2.88 MnT of ore.
Result of OMC iron ore e-auction held on 23 Feb’16
| Mines | Size (mm) | Fe (%) | Base Price on 23 Feb’16 |
Quantity Offered (MT) | Quantity Sold (MT) |
| Barpada Kasia (Barbil) | 10-40 | 62 | 1,600 | 4,000 | – |
| -10 | 62-60 | 900 | 12,000 | – | |
| Kurmitar (Koira) | 10-40 | 62 | 1,750 | 2,00,000 | 1,82,000 |
| -10 | 62-60 | 900 | 50,000 | – | |
| Daitari | 10-40 | 62 | 1,750 | 1,00,000 | 82,000 |
| -10 | 64-62 | 1,350 | 35,000 | – | |
| -10 | 62-60 | 1,200 | 4,000 | – | |
| Total | 264,000 | ||||
Quantity in MT
Base & bid prices in INR/MT on ex-mines basis; including of royalty
Source: SteelMint Research
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