India: Direct iron ore sales in Karnataka pick-up post SC verdict

The Supreme Court in May last year lifted restrictions on iron ore sales in Karnataka, allowing both contract sales as well as auctions to replace the older system of e-auctions conducted by the court-appointed Monitoring Committee. The verdict also allowed free exports of iron ore from the state.

Sources informed SteelMint that sales at e-auctions in Karnataka are edging down as preference is increasing for direct sales.

Snapshot of iron ore sales in Karnataka conducted this week-

• Recently, one of the leading iron ore miners from the state has concluded a deal of around 40,000-50,000 tonnes (t) of iron ore fines (Fe63%) at around INR 3,500/t ex-mines, excluding taxes.
  
  
• Another deal of around 32,000 t of fines (Fe61%) was concluded at INR 3,313/t, excluding taxes.
  
  
• Meanwhile, recent e-auctions from Karnataka witnessed weak responses. U Krishna Prasad conducted an auction for the sale of 16,100 t of iron ore lumps (10-40mm, Fe58.42-63.52%) on 18 April from Bellary district. The entire quantity remained unsold due to no takers.
  
  
• Also, VESCO's auction for 6,000 t of iron ore lumps (Fe64.50-64.55%) from its Dharmapuri mines on 17 April failed to receive a response as buyers showed no interest.
  
  

Export scenario-

Recently, a Karnataka-based iron ore miner has concluded an export deal for 51,000 t of low-grade iron ore fines (Fe57%), which was heard concluded at $75/t FOB, sources confirmed.

India's total iron ore production is estimated at 255 mnt in FY23, up by 2 mnt compared to 253 mnt in the preceding fiscal. Karnataka was the third largest iron ore-producing state with 38 mnt.