After initially ruling the international markets like China with its low grade iron ore supply, Goa, today is finding it difficult to attract buyers for purchase of ore through e-auction.
The e-auction process that commenced in February 2014, till date has received very poor response, with Directorate of Mines and Geology (DMG) struggling to sell 15.5 million tons of ore in last two years.
The e-auction is conducted through metal scrap trading corporation (MSTC) under supervision of Supreme Court appointed monitoring committee.
Of the total 15.5 million tons of ore identified for e-auction, only 11.1 million tons of ore has been sold out through 19 e-auctions held so far. Government has earned revenue of over Rs 1500 crores. Interestingly, of the total 11.1 million tons purchased ore, more than the half is still lying at the sites, with buyers not willing to lift it owing to transportation tussle with the locals there.
The first three e-auctions, held on February 17, March 4 and May 12 in 2014
had received a very good response. Over 15 companies had participated in the process. However, thereafter, with fall in iron ore prices in the international market, the demand for ore also reduced during the fourth, fifth and sixth, seventh e-auction- August 19, November 6, 2014 and May 19, and Aug 4 in 2015.
Though, the iron ore prices slowly picked up, State low grade ore lost its market in the hands of iron ore rich countries like Australia. Also, the transportation crisis hit them hard.
Thereafter, the e-auction never picked up pace. After very poor response to the eighth and ninth e-auction held in September and 10th and 11th in November, 2015, in a bid to attract more bidders, the DMG even slashed the minimum earnest money deposit (EMD).
The minimum EMD was fixed at Rs one lakh for bidding upto 5000 metric tons from the earlier Rs 25 lakhs for bidding upto 1,000 metric tons of ore.
The next three e-auction- 12th, 13th and 14th were held in December 2015, while the 15th and 16th held in April 2016. The 17th e-auction was held in September 2016, followed by 18th phase of e-auction in November 2016.
The latest e-auction-19th phase- held on April 21, saw only one bidder participating and purchasing 1.8 lakh tons of ore of the total 2.2 million tons of ore identified for e-auction.
Team TNV
