PANAJI
The eleventh e-auction of iron ore ended on a positive note, as the Department of Mines and Geology (DMG) managed to sell 4.2 lakhs tonnes of ore of the 11.2 lakhs tonnes that was on offer. This means that DMG sold 37% of the ore it had offered, which is its best performance in the last five e-auctions that were held.
There was no major change in the base price in the eleventh e-auction compared to the previous one. Sources said, “The bids were better this time, which means that the demand was better than the previous e-auction.”
In the tenth e-auction, which concluded on September 15, the department could sell barely 14% of ore it had offered. The worst performance was the e-auction on August 4, when it sold a mere 5% of ore it had offered. But, it must be kept in the mind that the latest performance can’t be termed a turnaround of any sort.
The DMG had a stellar run in 2014 during e-auctions. In the first four e-auctions, which happened between February 2014 and August 2014, DMG sold somewhere around 90% to 100% of ore it had offered. There were so many takers that hardly anything was left unsold. The recession in Chinese economy in the second half of 2014 and later resulted in poor performance at e-auctions. Given that China is far from a recovery, it seems that the DMG is unlikely to match its performance of early 2014 days.
The State government still has 8.6 million tonnes of iron ore left to be sold through the e-auction route, which seems like an uphill journey given the weak international market. At the same time, tonnes of auctioned iron ore are still lying at jetties, port and mines as the buyers couldn’t find the final seller. There is no provision in the law to penalize such buyers who are using real estate to keep their ore without paying any rent.
