India’s Ministry of Steel has proposed to states with iron ore resources to hold separate auctions of the raw material for actual end-users and commercial sales in order to offer an advantage to the former, an Indian government official said on Tuesday, June 20.
The official said that state governments should hold separate auctions for end-users and commercial sales as this would ensure that actual end-users - steel mills - could get secured volumes on offer.
The steel ministry has also suggested that state governments should earmark dedicated mines, the production of which would be auctioned exclusively to steel mills, while separate mines could offer their production by auction for commercial sale, the official added. He pointed out that this would be in line with the practice followed as regards coal.
In the case of coal, consumers were divided into the cement, sponge iron and thermal power sectors and separate auctions of coal were conducted for each of these consuming industries.
According to the official, while the only long-term solution to achieve the Indian government’s target of 300 million metric tons of domestic steel production by 2030 could be a sustained increase in domestic production of iron ore, separate auctions for steel mills would mitigate the raw material supply bottlenecks faced by domestic steel mills in the short term.