India: Karnataka Iron Ore E-auction Sales Rebound in Oct'19

In the month of Oct’19, few private miners of Karnataka reduced iron ore prices at around INR 200-250/MT. Vedanta - largest iron ore supplier in Oct'19 Karnataka auction lowered iron ore fines prices (Fe 58.5%) by around INR 230-240/MT in Oct’19.

On yearly basis, Karnataka e-auction sales also moved up by 72% in Oct’19 as compared to 1.64 MnT in Oct’18.

JSW Steel’s iron ore sourcing from Karnataka e-auctions doubled in Oct19-: JSW Steel’s iron ore purchases from Karnataka e-auctions increased significantly by 96% to 1.92 MnT in Oct'19 compared to 0.98 MnT in Sep'19. Out of 1.92 MnT iron ore sourced by JSW, Vedanta was the largest supplier with 0.85 MnT, increasing sharply by more than three-times against at 0.27 MnT last month.

NMDC stood the second-largest iron ore supplier to JSW with 0.49 MnT up 74% as against 0.28 MnT last month and thus contributed around 25% of total JSW sourcing.
JSW iron ore sourcing from other private mines also increased by 38% to 0.58 MnT as against 0.42 MnT in last month.

Vedanta turned out to be the largest iron ore supplier from Karnataka e-auctions in Oct’19-: Vedanta stood the largest iron ore supplier via Karnataka e-auction in the month of Oct’19. Company iron ore sales have jumped to 0.91 MnT in Oct’19 as against 0.39 MnT in Sept’19.

NMDC was the second-largest iron ore supplier via Karnataka e-auction sold 0.57 MnT iron ore via e-auctions in Oct’19, up by 36% M-o-M against 0.42 MnT last month. Out of the total quantity sold by NMDC via e-auction, around 86% of the material purchased by JSW steel and rest 14% by others.

Followed by at Ramanadurga Iron Ore Mine 0.29 MnT, B. Rudra Gouda stood at 0.20 MnT.

Ministry of Mines made development in the MMDR Amendment Act to get the issue of the NMDC Donimalai case resolved and grant renewal of it. The Central Government has made a renewal of mining leases of public sector companies mandatory without going through the auction process. The amendment paves way for the renewal of NMDC Donimalai mines where an operation was suspended after lease expiry in Nov’18.

Major Highlights of Oct'19 Karnataka iron ore e-auctions-:

1. Electrotherm India Ltd - a Gujarat based company procured 8,000 MT iron ore lumps (Fe 64.79%) at INR 3,775/MT from P. Balasubba Setty & Son.

2. XINDIA – Bellary (India) based company procured around 36,000 MT iron ore fines (Fe 63% -66%) from Ramanadurga iron ore mine supplier 24,000 MT fines (Fe 65-66%) at INR 2,550-2,656/MT and rest 12,000 MT from other miners from Karnataka.

3. Vedanta Ltd procured around 24,000 MT iron ore lumps (Fe 65%) from Vyasankere iron ore mines (around 20,000 MT) and G.G Brothers (around 4,000 MT) at INR 2,875 -3,125/MT and INR 3,410/MT (basic prices, taxes extra).