Around 11.5 million tonnes of iron ore was produced in the state and largely exported prior to the mining ban. This will now be considered for use by domestic steel makers who have made investments in putting up beneficiation and pelletisation plants.
An increase in these capacities would allow lower quality ore (fines) to be consumed domestically. R K Goyal, MD, Kalyani Steel said, Whatever ore we get we will bid for it, but we will still look for higher iron content ore which will increase the plant efficiency. We prefer more than 55+ Fe content ore.
The domestic steel mills have traditionally preferred ores with higher iron content but are now developing technology to use low-grade ore. Indian steelmakers are raising their iron-ore beneficiation and pelletisation capacities as they seek to expand the range of ore that their plants can handle.
The Goan ore under auction could support 7 million tonnes of steel capacity annually.
The Supreme Court appointed a three-member monitoring panel to oversee e-auctioning process and said the proceeds from the sale will be kept in separate fixed deposit accounts by the Goa government till the apex court finally decided the matter.
Seshagiri Rao, joint MD and group chief financial officer, JSW Steel, said the company would take a call on bidding "on prices based on grade and landed cost. In Karnataka, we are using even low grade, even as low as 45-50 Fe content.
Many small unlisted companies have also set up the so-called beneficiation plants, which extract waste material from ore and increase its iron concentration.
Until now, few mills have had the capacity to process lower quality iron ore, with chinese steelmakers making up the main users.
Goa used to be India's top exporting state, with sales of more than 40 million tonnes a year mostly to China. But it has not produced or exported any ore since the Supreme Court imposed a ban to curb illegal mining.
The investment in pelletisation capacity has coincided with fall in India's iron ore production and exports as the courts have partially banned iron ore production in Karnataka and fully stopped mining in Goa. Iron ore exports are also restricted in Goa and Orissa.