The State government’s first e-auction of low-grade iron ore dumps received a muted response from mining companies, with just one of the five identified dumps successfully auctioned.
Kai International emerged as the sole successful bidder for the 14 million tonne low-grade iron ore dump located at Dharbandora, quoting a bid premium of 22.1 per cent, just marginally above the reserve price fixed by the government at 22 per cent.
The pricing mechanism implies that if the benchmark rate determined by the Indian Bureau of Mines is Rs 100 per tonne, the successful bidder would pay Rs 22 per tonne to the State at the reserve price.
The government had identified 10 low-grade iron ore dumps for auction, of which five were taken up in the first phase. Only two companies, Kai International and Vedanta participated in the bidding process for the Dharbandora dump.
Director of Mines and Geology Narayan Gad attributed the poor response to the relatively smaller size and lower commercial viability of most dumps, except for the Dharbandora site, which holds a substantial quantity of low-grade ore.
Gad said the government is likely to conduct a second round of auctions soon.
