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Goa govt relaxes norms for iron ore auction

The government of Goa has lowered the earnest money deposit (EMD) for iron ore auction and has reduced the lot size by 90 per cent to accommodate more players and intensify competition among participants.
In its modified auction policy, the mineral rich tiny state on the West coast of India has reduced minimum deposits of Rs 2.5 crore for 10,000 tonnes of iron ore auction to Rs 25 lakh of deposits for 1,000 tonnes quantity. Interested participants, however, can deposit in multiple of Rs 25 lakh for equal multiple of 1,000 tonnes quantity of bid. On deposit of Rs 10 crore, however, participants can bid for any quantity.
“The modification is meant to accommodate small sponge iron players who could not participate because of higher deposit and quantity. Now, they will be able to participate in the bid which will increase competition,” said a senior official of a leading iron ore miner and exporter in the state.
Since the mining ban in the state around 18 months ago, Goa government has so far auctioned around 2.2 million tonnes of iron ore of the total stock of 11.48 million tonnes. Beginning February this year, the government of Goa conducted three rounds of iron ore auctions of which only the first auction got overwhelming response. The remaining two received average responses.
“Iron ore exporters from Goa have lost the niche to remain a long term supplier of the steelmaking raw material due to mining ban. Now, the fresh entry into the export market will be treated as the new entrant. Also, Goa has lost importers’ faith. Consequently, iron ore exports from the state look impossible,” said the official.
Stakeholders including, state government, miners and mining dependents want iron ore exploration to resume at the earliest to restore Goa’s lost position in the export market. For this purpose, the state government has assured that it will come out with a revised mineral policy soon.
“The government is worried over the response as iron ore prices have fallen steeply since then. At the current price, exports are not feasible, especially with 30 per cent duty. Hence, iron ore auctioned in Goa would be sold to local players only,” said Haresh Melwani, Chief Executive Officer of H L Nathurmal & Co, an iron ore miner and exporter in the state.
According to informed sources, 3.7 million tonnes of iron ore auction in the fourth round is scheduled on August 18. Another 2 million tonnes is likely to be sold in the fifth round scheduled in the last week of August.
Source: Business Standard