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Jharkhand ore cheaper in Karnataka than in E Auction

The high prices of iron ore routed through E auctions and issues linked to iron content in dispatches are forcing steel and sponge iron makers in Karnataka to look to Jharkhand and Orissa.

Mr Dinesh Kumar Singhi MD of Karnataka based BMM Ispat told Business Line that the base price of INR 2,010 a tonne for the 57% iron grade in the last auction was too high, considering that buyers were getting the same earlier from NMDC Ltd for about INR 1,400 a tonne, before the Supreme Court on September 2 directed the state to hold E auctions.

He said there were no takers for about 65% of the stocks lined up for the last auction conducted on October 14.

When told that NMDC officials had said the pricing was in line with those in China and Japan, he said the price of 57% grade in China was about USD 110 (INR 5,390), which factored in about INR 3,000 for transport, beside 20% export duty.

On Karnataka e-auction prices, he said in addition to the base price, buyers would have to pay 10% for royalty, 12% as forest development charges and 1% cess, totalling 23% more, which pushed the price to INR 2,472 a tonne. Transport would cost another INR 750 a tonne.

In comparison, the 63.5% grade from Jharkhand could be got at INR 4,200 a tonne, inclusive of the transport cost of INR 2,200.