Photo by: Reuters
KOLKATA (miningweekly.com) – There were no takers for Indian iron-ore fines in the wake of a weakening of international prices and high local tariffs making exports unviable at current offer levels.
Fearing a lack of response under such market conditions, the government of the western Indian province of Goa on Tuesday cancelled the e-auction of 2.18-million tonnes of low-grade iron-ore fines, a government official said.
He said that with Indian export offers for high-grade iron-ore fines (Fe content 63.5% and above) falling below the $90/t mark to a range of $87/t to $88/t, local traders and exporters were not expected to respond and put in bids at the e-auction.
The low-grade fines were primarily lifted at the auctions by traders for exports to China but with current offers dipping around $87/t to $88/t and factoring in export duty of 30% plus a provincial government levy of 10%, exporters would be unwilling to make commitments at the auctions since margins would be un-remunerative.
The e-auction could be revived once market conditions improved and the government was confident of a positive response from local traders and exporters.
The cancellation of the fifth round of e-auction was a setback for the local government which had planned to liquidate 15-million tonnes of low-grade iron-ore fines stockpiled at various mines since mining operations were halted two and half years ago for illegal mining across the province.
The local government had been able to reduce stockpiles by five-million tonnes through four previous rounds of e-auctions, the official said.
Simultaneously, iron-ore pelletisation plants in eastern Indian province of Orissa were complaining of shortage of iron-ore fines for their plants following closure of 18 iron-ore mines in the region following an order of the Supreme Court.
The Pellet Manufacturers Association of India (PMAI) has demanded release of 36-million tonnes of iron-ore fines stockpiles at pitheads across the province to mitigate shortage of raw material for pellet plants.
PMAI has claimed that domestic pellets plants, which have 65-million tonnes a year aggregate production capacity, were operating at no more than 20% capacity utilisation in face of shortage of fines.
PMAI, in a memorandum to Minister of Mines Narendra Tomar, sought immediate release of iron-ore stockpiles since the 18 mines had stopped merchant sales and have been restricted to supply raw material from pitheads to only actual steel producers.
An official said that while Orissa was facing shortage in production, it was not feasible, nor viable for pellet plants to source fines from Goa owing to prohibitive transportation costs.