After iron ore, MSTC to e-auction commodities

State-owned MSTC, a category-I miniratna, has e-auctioned about half of the entrusted 250 lakh tonne of iron ore lying at Bellary, Chitradurga and Tumkur in Karnataka.

The online auctions were conducted under the direct supervision of a Supreme Court-appointed monitoring committee.
The company expects to finish the process, brought about by the iron ore mining ban in Karnataka, by April-May.

Having conducted 17 “smooth and transparent” e-auctions to the satisfaction of the supervising committee, MSTC has now sought mandate to auction off iron ore mined in other states as well, said S K Tripathi, chairman-cum managing director, MSTC.
The e-auction model, Tripathi said, “can be replicated in other states as well.”

Cotton, tobacco and other agri produce are also being sought to be e-auctioned next.

“We have the best possible IT infrastructure which is inspected periodically by the experts concerned,” said Tripathi.
In 17 online auctions so far, MSTC has sold 112.72 lakh tonne of the Karnataka ore (containing both high and low iron content) for `2,601 crore, generating a per-tonne realisation of `2,307.50.
Among the 50-odd buyers are state-owned miner NMDC, JSW, Monnet Ispat and small-scale steel producers, said Tripathi.
In the latest auction, held on December 27, MSTC auctioned 12.72 lakh tonne at an average `1,880 per tonne, generating `239.16 crore.

Some bidders have complained about the high reserve prices relative to the quality of ore auctioned.

Such concerns are “minor in nature,” said Tripathi. “Well, buyers have been mostly happy with the outcome.”

He reasoned that any unsold ore would be an aberration as sales are not correlated to lack of demand or low grade of ore. A faulty laboratory report on iron content may create unrealistically high reserve price, which may not generate any bid.

“But these things get resolved in subsequent bids,” said Tripathi.