India: OMC reserves 590,000 t of iron ore from Guali & Jiling-Langalota mines for the upcoming auction

State PSU miner Odisha Mining Corporation (OMC) has scheduled its next iron ore e-auction on 10 Mar'21 for 1.44 mn t of fines, with a grade band of Fe 60-62%. The base price of the material offered in the auction is yet to be declared.

In addition to the Daitari, Gandhamardhan (A &B blocks), Koira and Tiring Pahar mines, OMC is offering a total of 590,000 t from the Guali and Jilling-Langalota iron ore mines that have come under its kitty recently.

Guali and Jilling-Langalota were given over to OMC by the government after the respective bidders JSPL and Shyam Ores, Jharkhand, failed to commence operations due to disputes and other constraints. This was in the backdrop of iron ore supply shortage in the country due to non-operationalisation of auctioned mines in Odisha. The mines have a combined EC limit of 12 mn t/year.

It deserves mentioning that steel major JSPL had won the Guali mine at the Odisha auctions in early-2020 by promising to pay a premium of 144%, while Shyam Ores (Jharkhand) Private Ltd. had bagged Jilling-Langalota for a premium of 132%.

Union Mines Minister Pralhad Joshi inaugurated the two mines recently that are expected to augment iron ore production in Odisha. The mines have been allotted to OMC under the new mining reforms for a period of 10 years and are required to pay a premium of 1.5 times of royalty (equivalent to 22.5%).

It is believed that OMC will reserve around 70% of the minerals extracted for fulfilling long-term contracts and could put the rest for sale at auctions.