ArcelorMittal-Nippon Steel participating in auctions in Odisha: CEO Dilip Oommen
To securitise its iron ore requirements, ArcelorMittal Nippon Steel (AMNS) is participating in the ongoing auctions of iron ore mines in Odisha, a top official of the company said.
ArcelorMittal Nippon Steel India (AMNS India) is a 60:40 joint venture between L N Mittal-owned ArcelorMittal and Japan-based Nippon Steel Corporation.
“We are participating in ongoing auctions of mines in Odisha,” AMNS CEO Dilip Oommen told PTI on the sidelines of an industry event here.
When asked about the number of mines his company was bidding for in Odisha, he without sharing any figure replied “it is more of iron ore, less of coal.”
He also replied in affirmative when asked about whether the company would be interested in more iron ore and coal mines which would be put on the block in future for auction.
Speaking on the importance of the opportunity, Oommen said any steel company has to securitise its sources of raw materials and AMNS is no different. So it is also participating in the auction process to securitise its iron requirements.
AMNS India buys iron ore fines in Kirandul in Chhattisgarh, where its beneficiation is carried out and transported to Vizag through slurry pipeline where it is converted into pellets and further transported to Hazira plant in Gujarat.
Similarly in Odisha, iron ore fines are bought from private miners at Dabuna beneficiated and sent through slurry pipeline to Paradip for conversion into pellets and shipped to Hazira.
Linkage of iron ore mines will help company reduce input cost significantly.
After the annulment of three notices inviting tender (NIT) released in October 2019 for auction of iron ore and manganese blocks because of conflicts between participating bidders, the Odisha government released an NIT for 20 iron ore and manganese blocks on December 6, 2019.
The technical bids were expected to begin in the first week of January.
An industry source that the auction process for these mines have begun and companies have started submitting in their bids.
While 15 of the 20 mines to be auctioned predominantly have iron ore, three have both iron ore and manganese, while the remaining are primarily manganese reserves.
The 18 mines containing iron ore reserves together hold 1,600 million tonne of which 33 per cent (five mines) are reserved for specified end-use (captive usage). These are old mines where leases are set to expire in March 2020.
While sharing his outlook for the steel sector, Oommen said, the auto industry — which is also a consumer industry of steel — has started doing better than what it was before October.
The industry is also facing low demand and high input cost.
“There has been a slow down of demand… one thing coming in the way is uncertainty of the auction process in Odisha. The iron prices have (also) gone up steeply… by Rs 750-800 per tonne and continues to go up, ” he said.
Iron ore is a key raw material for steel making and any revision in its prices directly impacts the prices of steel.Get access to India’s fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code “GETPRO”. Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.