Indian state-owned steel producer, Rashtriya Ispat Nigam Limited (RINL) is seeking to procure 150,000 mt of iron ore fines with minimum 63 percent Fe content through competitive bidding, company sources said on Wednesday, August 29.
The sources said that while domestic mine owners will be qualified to submit bids to supply the raw materials, traders and stockists too will be eligible to compete in the tender process subject to the condition of their ability to complete supplies in three lots of 50,000 mt each and successful in participating in reverse auction to be held by RINL.
The procurement of raw materials is a significant departure from the company’s usual route of sourcing raw material from state-run miner, NMDC Limited from latter’s Bailadila mines in central Indian province of Chhattisgarh on negotiated basis.
Stipulating that bid price to be on basis on delivery at Gangavaram Port, Vishakhapatnam, in close proximity of RINL’s 6.3 million mt steel mill, the company expects to reduce transportation and handling costs of the raw material.
In recent months, RINL has been focusing on reducing costs of procuring raw materials through merchant purchase and lower transportation costs, the sources added.
RINL, which does not have any captive iron ore mines, has entered into a joint venture with KIOCL Limited (formerly Kudremukh Iron Ore Company Limited) to construct a 2 million mt per year iron ore pelletisation plant located at Vishakhapatnam for captive consumption by RINL’s steel mill with the steel company expecting to reduce iron ore transportation costs by at least INR 2,000/mt ($29/mt), the sources said.