Over 50 firms in race for Odisha ore blocks
A little more than 50 companies are vying for 10 ore blocks — seven purely iron ore and three also of manganese — notified for auction by the Odisha government. The existing lease validity of all these merchant mines ceases on March 31, 2020.
Representatives from that many companies were present at a pre-bid conference convened by the state steel and mines department. Apart from top steel producers like Tata Steel, JSW Steel, Jindal Steel & Power, and Arcelormittal, all leading merchant miners in Odisha and Goa, as well as secondary steelmakers, participated.
“We had overwhelming turnout at the pre-bid conference. It is expected that all the players will aggressively bid when we conduct the electronic auctions for the blocks,” said a government official.
Last month, the state directorate of mines notified the 10 lapsing blocks — Nuagaon, Thakurani, Siljora-kalimati, Jilling-langalota, Jaribahal, Roida-ii, Jururi, Narayanposhi, Mahulsukha, and Ganua, which are located in the districts of Keonjhar and Sundergarh. All the leases are currently with merchant miners or are otherwise non-captive ones. The final date for bids is November 18.
Three of the 10 are reserved for enduse units and the are meant for bidding by merchant miners only. Odisha has hitherto auctioned three iron ore blocks. It was the first state to auction one after the new rules in this regard were notified by the central government in 2016. That same year, it successfully auctioned the Ghoraburhani-sagasahi block, with an estimated 99 million tonnes (mt) of deposits. This was bagged by Essar Steel (an entity which later turned insolvent). Two more virgin iron ore blocks were put to online auction that same year — Bhushan Steel (now Tata Steel BSL) and Bhushan Steel & Power emerged as successful bidders.
Last month, the state government put to electronic auction two chromite blocks — the Misrilall Mines and Kamarda mines. Both merchant mines drew high premiums and were won by TS Alloys, a fully owned Tata Steel subsidiary. TS Alloys placed steep bids for bagging both — 88.5 per cent of the sale value of the block for Misrilall and 96.8 per cent for Kamarda.
If the outcome at these is an indication, high bidding is likely for the other mines as well, especially some of the prized deposits in iron ore. To stave off lower bids, the state has kept the reserve price on the higher side. For iron ore blocks with resources up to 10 mt, this is 15 per cent of the sale value of the mineral asset. For deposits beyond 10 mt, the reserve price is 25 per cent. And, in the case of the immense Gonua mine, now held by big merchant player KJS Ahluwalia and t he estimated deposits are in excess of 700 mt, the reserve price is 50 per cent, a source confirmed. For all manganese ore mines, the bid price is uniform at 15 per cent.