The upcoming phase of iron ore auctions in Odisha is likely to witness intense bids as pellet manufacturers, sponge iron players, and pig iron producers compete alongside steel companies.
Odisha has hitherto put three iron ore blocks -- Ghoraburhani-Sagasahi, Kalamang West and Netrabandh Pahar -- for auction. All three were bagged by steel producers- Essar Steel, Bhushan Steel Ltd (now Tata Steel BSL) and Bhushan Steel & Power Ltd. Since steel plants were listed as end use for the three iron ore deposits, the secondary steel makers were left out of the auction process.
However, Odisha -- the largest iron ore producer in the country -- has taken cues from the Karnataka government, and decided to include the secondary steel producers as well. About 50 per cent of Odisha's steelmaking is through the secondary steel route.
“Permitting pellet makers and sponge iron producers will bring in more competitiveness to our iron ore online auctions, a government official said.
Odisha's steel & mines department has decided to fast track the auctions process after getting the go-ahead from the Union mines ministry on hiking mining lease area cap to 58 square kilometres (sq km), up from 10 sq km prescribed in Mines and Minerals- Development & Regulation (MMDR) Act. The Centre had advised the Odisha government to keep a hold on auctions of iron ore and associated minerals until a decision on enhancing area limits was arrived at. A revised cap on mine lease area implies that players like Tata Steel can compete in the upcoming auctions.
The wrangling over mine lease area limits had throttled auctions in Odisha. Not a single mineral block could be auctioned in the state in FY19 as the matter related to mine lease area ceiling got enmeshed in litigation. The Delhi High Court had stalled auctions until clarity emerged on the eligibility for acquiring an additional mine by a lessee who already held in excess of 10 sq km. In the current fiscal too, though the state had prepared some iron ore blocks for auctions, they had to be kept in abeyance.
In the next phase, the state government is offering a host of iron ore blocks simultaneously for auctions. As many as 20 iron and manganese ore blocks- a mixture of merchant leases lapsing by March 31, 2020 and freehold blocks will be put up for auctions. Notice Inviting Tenders (NITs) and tender documents are scheduled for October 4 and 14, 2019. The bid due dates are scheduled for November 18 and 28, 2019. Letters of intent to the preferred bidders are expected to be issued by January 2020.
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