Ahluwalia Brothers pulls out as RML-JSW Steel fights for Ganua Iron Ore Block in Odisha’s Sundargarh

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By Anurjay Dhal

BHUBANESWAR:  Finally Ahluwalia Brothers pulled out after offering a premium of 103 while Rungta Mines Ltd and JSW Steel continue to fight for  for the Ganua Iron Ore Block under Koira mining circle in Odisha’s Sundargarh district. Sources said the premium of Balda set by Serajuddin and Co may cross for Ganua block. Sources also said that Serajuddin and Co has completely changed the mind set of existing mine owners.

The premium offered by bidders reached at 106.55 till last reports came in on Wednesday with as many as 4 top bidders out 11 were on fray for the Ganua Iron Ore Block under Koira mining circle in Odisha’s Sundargarh district. The present lease holder of the mines is PK Ahluwalia and is expiring by March 31, 2020. Bidding continuing till last reports came in.

Sources said , the present lease holder Ahluwalia Brothers pulled out midway  as they already lost Nuagaon and Thakurani blocks to JSW Steel and ArcellorMittal India Pvt Ltd. With tthis, Ahluwalia Brothers lost their 3rd mines.

“Since two major forts of Ahluwalia Brothers have came out of their hands , they are now fighting for the battle of self-respect to save the last fort of their empire, the aggressive bidding by Serajuddin and Co might have inspired them to go up to any extent,” said a Joda-Barbil based Industrialist.

Official sources manning the online bidding process however informed that of the 11 technically qualified bidders, Kamaljeet Singh Ahluwalia, Rungta Mines Ltd, Shyam Steel Industries Ltd, Amalgam Steel & Power Ltd and JSW Steel are in the final race for the iron ore block.It is one of the blocks reserved for specified end use for sponge iron, steel or pellet plants. In operational for more than 50 years, its lease period will end on March 31.

Meanwhile, Serajuddin and Co retained Balda iron ore block during the auction that went past midnight (2.41 am) on Tuesday. JSW Steel has already bagged two mines — Nuagaon and Narayanposhi — with a total reserve of 980 million tonnes, ArcelorMittal India Pvt Ltd won the third iron ore block notified for auction in Odisha on Monday.

After Sajjan Jindal led JSW Steel took away 2 major mines of KJS Ahuluwalia Group including the Nuagaon and Narayanposhi of N Saraf led Aryan Mining and Trading Corporation and later Laxmi Mittal led ArcellorMittal India Pvt Ltd got control over Thakurani Mines, earlier held by Ahluwalia Brothers, speculations were rife that Big Steel makers would snatched away all mines held by Merchant Miners but on Tuesday, Serajuddin and Co proved that Merchant Miners can do anything to retain their old mines.

Serajuddin and Co retained Balda mines in Keonjhar district committing to pay 118.05% of its sale value of ore to the Odisha government. The auction went on through the day till 2.41 AM, the official said.

“What we were indicating that Miners should Bid aggressively to retain their mines, now after Serajuddin and Co retained Balda mines, this may be a game changer for other miners like Rungta Mines Ltd , Essel Mining Ltd and miners should come forward to retain their mines. And it was a very bold step by Serajuddin and Co,” said an Industry expert in Bhubaneswar.

Sources said, RML and EML also may have planning for aggressive bidding to retain their mines. RML has major mines under Joda-Koira mining circle of Odisha’s Keonjhar and Sundargarh district.

Surprising all 4 other participants , Serajuddin and Co has retained the Balda iron ore block in the action in Odisha’s Keonjhar district.

Of the 13 technically qualified bidders, Serajuddin & Co, ArcelorMittal India Pvt Ltd, JSW Steel, Adani Enterprises Ltd and Rungta Mines Ltd are in the final race for one of India’s largest iron ore mines, Balda in Keonjhar.Balda Block Iron ore is being held by Mines of Ms Serajuddin & co.

One of India’s largest iron ore mines, Balda in Keonjhar has an estimated ore reserve of 200.11 million tonne. The mine has a capacity to produce 15.5 million tonnes of iron ore a year.

In October last year, the Directorate of Mines had invited tenders for 16 mineral blocks cleared by the high-level committee of the Odisha government for auction.

JSW Steel had bagged two mines — Nuagaon and Narayanposhi — with a total reserve of 980 million tonnes, ArcelorMittal India Pvt Ltd won the third iron ore mine notified for auction in Odisha on Monday.

Meanwhile, Sajjan Jindal of JSW Steel has the last laugh. Even Jindal’s younger brother Naveen Jindal had seen the market capitalisation of his Jindal Power & Steel going through the roof in 2008, thanks to its power business and considerable mining assets.

Yes, in the last two years, JSW Steel had made some progress. Through auctions in Karnataka, it now owns six iron ore mines in the state. But these are small, with a combined annual production of up to eight million tonne. They would meet about 35 percent of the company’s iron ore needs.

But on January 31, even as rest of the India Inc was busy reading the details of Economic Survey and looking forward to the Union Budget, news came that JSW Steel had won the Nuagaon mine in Odisha.

It was a major victory. JSW Steel had outbid scores of other competitors, including ArcelorMittal, Tata Steel and the Adani Group. The mine was the largest among those was on the block, with a reserves of around 790 MT. That is higher than the combined reserves of rest of the mines on offer.

These mines were auctioned by the state, ahead of March 31, when their leases would have expired.There was more for Jindal. On February 2, news reported that JSW Steel had bagged one more mine in the auction. This was the Narayanposhi iron block with reserves of 190 MT.Put together, JSW Steel now has access to about a billion tonne of iron ore.

“Both wins in Odisha, will give JSW Steel an annual supply of around 22 MT of captive iron ore for its plants. The C-category mines in Karnataka are now fully operational.  So, around 30 MT of iron ore are now readily available to meet the company’s requirements,” said a senior industry executive.

The mines now make the steelmaker nearly, completely self-sufficient in its iron ore needs, as it can immediately start sourcing the raw material from the Odisha mines, which are operational.

To produce a tonne of steel, around 1.5 to 1.6 tonne of iron ore is needed.But Jindal can’t sit easy, not yet.He is currently expanding JSW Steel’s capacity. Later this year, 5 MT of additional capacity will come into use at the company’s Dolvi facility. And if its acquisition of Bhushan Power & Steel materialises, then that will add another 3.5 MT of steel capacity. These will increase its iron ore requirement.

Can Jindal win a few more mines from the auctions in Odisha? In total, 18 mines are being auctioned. Though he has already got control of the jewel of the lot, the remaining mines have a combined reserves of about 500 MT. He will surely try to get as many as possible.

Also, JSW Steel doesn’t have coal mines, either. On the other hand, Tata Steel has enough to meet at least half of its coal requirement. Jindal would be looking to bridge this gap too.

Earlier, ArcelorMittal India Pvt Ltd has bagged the Thakurani iron ore block in Odisha. Thakurani iron ore block has an estimated reserve of about 179 million tonne.

JSW Steel bagged two iron ore mines with total reserves of 980 million tonnes. It won Nuagaon mine and Narayanposhi iron block.

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