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NMDC likely to e-auction 2 lakh tonnes of iron ore this week

NMDC likely to e-auction 2 lakh tonnes of iron ore this week
PTI
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First Published: Wed, Sep 28 2011. 05 30 PM IST

Rana Som, chairman and managing director, NMDC ltd. File Photo.
Rana Som, chairman and managing director, NMDC ltd. File Photo.
Updated: Wed, Sep 28 2011. 05 30 PM IST
New Delhi: Country’s top iron ore producer NMDC on Wednesday said it is looking to e-auction about two lakh tonnes of the precious steel making raw material from its Karnataka mines within this week.
“Last week, Supreme Court had given a direction that all sales to long-term or spot customers by NMDC will have to be done through e-auction. I believe this will take place this week. We are looking at a minimum quantity of 2 lakh tonnes,” NMDC chairman Rana Som told PTI.
Rana Som, chairman and managing director, NMDC ltd. File Photo.
Som said the main concern at this point is the problem of evacuation as stocks are piling up. Till the e-auction takes place, the company has to resort to a minor production cut, he said.
National Mineral Development Corporation (NMDC) mines about one million tonnes of iron ore every month from its Bellary mines in Karnataka.
“For two weeks we have achieved the targeted production of 33,000 tonnes per day. But then during the last four-five days the production has been less at about 26,000 tonnes due to accumulation of stock as we could not start e-auction till date,” Som said.
He added that the company has a stock of about 1.5 lakh tonnes in Karnataka including 92,000 tonnes of iron ore lump.
The state-run PSU has cut its supplies to all eight long term customers, including JSW, Ispat Industries, Kudremukh Iron Ore and Lanco following a Supreme Court order last Friday.
The ruling set aside the long-term supplies agreement of NMDC with various steel units in the state, asking the firm to make all supplies in Karnataka only through the e-auction.
This resulted in production cuts by steel units including JSW which is running its Vijayanagar plant at 30% capacity since Saturday due to iron ore shortage.
In its earlier orders, the apex court had allowed NMDC to produce 1 million tonnes of iron ore per month from its mines in Karnataka.
It had given permission to e-auction 25.88 MT of iron ore lying at various mines in state and fixed the quantity at 1.5 MT per month.
“We are trying to comply with Supreme Court order in letter and spirit,” Som said.
He added a monitoring committee of the state government will supervise the e-auction and will organise it in a manner that the problem of evacuation is rightly addressed.
Earlier, addressing mediapersons, Som said e-auctioning will give the company a better price.
However, it will “not allow us to evacuate as fast as we can do under long-term contracts,” he said.
The Maharatna firm till now has been selling iron ore from its Bellary mines in long-term prices and not spot prices.
At present, the NMDC has annual iron ore production capacity of about 30 million tonnes from 3 fully mechanised mines in Chhattisgarh and Karnataka.
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First Published: Wed, Sep 28 2011. 05 30 PM IST