JSPL bags 200 million tonnes iron ore block in Odisha auctions

Jindal Steel and Power Ltd (JSPL) has bagged an iron ore block in the ongoing auctions in Odisha with reserves of about 200 million tonnes (MT). The iron ore block, Guali mine, is spread over 365 hectares in the Keonjhar district of the state. Other players who had bid for the block included JSW, Adani Group and  KJS Ahluwalia among others.

JSPL won the Guali mine which has iron ore reserves of 198 million tonnes. The iron ore reserve block has been bagged at a premium of 144 per cent.

Securing iron ore linkages would help the company as JSPL looks to scale up its steel making capacity in India up to 8 MTPA (million tonne per annum) in financial year 2020-21, from about 6.5 MTPA estimated to be at the end of 2019-20 fiscal.

The development will allow the company to remain self-sufficient of the key raw material iron ore for years now, an expert said.

After the annulment of three notices inviting tender (NIT) 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.

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 hold iron ore reserves of 1,600 million tonnes 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.

Shekhar Ghosh is consulting editor, Indoasiancommodities.com. He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He can be reached at shekhar.ghosh@indoasiancommodities.in.

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