India: Rungta emerges largest buyer at OMC iron ore lumps auction
Rungta Mines emerged as the largest buyer at OMC’s recent lumps auction. Odisha’s leading PSU miner, Orissa Mining Corp (OMC), had scheduled an iron o...
Rungta Mines emerged as the largest buyer at OMC's recent lumps auction. Odisha's leading PSU miner, Orissa Mining Corp (OMC), had scheduled an iron ore lump e-auction on 31 Aug'21. The average grade of material put to auction varied from Fe 62%- 65%. Out of the total 765,000 tonnes (t) iron ore lumps, the miner received bids for only 238,000 t of material, according to market sources. The offers received were flat in line with the base price of the material.
OMC iron ore lump e-auction summary
Base price in INR/t on ex-mines basis; Including Royalty
Qty in t
Source: SteelMint Research
According to the data received by SteelMint, eastern India-based Rungta Mines emerged as the largest buyer at 50,000 t of iron ore lumps, booking 21% share of the total material. It is notable that the miner's sponge-making capacity has increased from 1.12 mntpa a couple of years back to the current 1.48 mntpa. Rungta Group has sponge plants in Jharkhand (0.66 mntpa) and Odisha (0.81 mntpa).
Prakash Industries recorded the second-highest iron ore lumps purchase at 44,000 t, followed by Adhunik Metaliks at 20,000 t.
Iron ore dispatches by state-owned merchant mining company OMC fell by 43% to 1.34 mn t in Jul'21 from 2.37 mn t in Jun'21, according to SteelMint's data. A few trade sources believe that the revised earnest money deposit (EMD) criteria could be another reason for limited participation in OMC's auction.
The EMD should be deposited with MSTC at least one working day before the auction. The amount shall be refunded after successful lifting of at least 80% of the auctioned quantity. However, if the buyer fails to lift the allotted quantity, the penalty @2% (including GST) of the sale value of the calculated lifted quantity shall be charged.
In case, the buyer has deposited the EMD with MSTC but is not taking part in the e-auction then he shall be considered a defaulter and restricted from taking part in the two consecutive e-auctions.
With 13.3 mn t of iron ore production in FY'21, OMC had emerged as the leading merchant miner in Odisha.