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NMDC expects e-auction of iron ore to start soon

29 Sep 2011 Evaluate

NMDC expects e-auction of iron ore produced from its mines in Karnataka to begin later this week. This will hit customers who source iron ore through long-term contracts. These include JSW Steel, Tata Metaliks, Ispat Industries, Kudremukh Iron Ore Company Ltd, Southern Iron and Steel Company (SISCOL) and Lanco Industries.

NMDC's move is following the Supreme Court direction last week that all sales to long-term or spot customers will have to be done through e-auction in Karnataka. NMDC is looking to sell about 2 lakh tonnes through the e-auction route this week. Though the e-auction process helps NMDC fetch better rates, it also poses a concern due to slower evacuation and resultant stocks pile up.

NMDC is the only company allowed by apex court to operate two mines in Karnataka, following the ban on mining in Bellary region on environmental grounds. The company has been asked to produce about a million tonnes a month by the court to meet the requirement of local steel mills.

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