India’s APMDC prepares to float new barite tender
Published: Friday, 27 November 2015
Previously awarded contracts for barite mining India were set to expire on 30 November, prompting APMDC to consider new tender terms.
By Sunder Singh
India’s Andhra Pradesh Mining Development Corp.
(APMDC) is gearing up to launch a new tender for barite mining
and exports, as the initial six month tenure of the last round
of auctions draws to a close.
After fumbling an initial attempt to sell off mineral rights
at the end of April this year, Hyderabad-based APMDC
successfully concluded the tender to mine and ship barite in
the southeast Indian state at the end of May, with four
domestic firms winning contracts to exploit the oilfield
Mumbai-based Ashapura Group, and Chennai-headquartered Oren
Hydrocarbons and Trimex Sands Pvt Ltd, each received licences
to mine 100,000 tonnes barite with a specific gravity (SG)
grade of 4.2. Another Indian company, IBC Ltd, successfully bid
for 50,000 tonnes SG 4.1 material for a period of six months.
Each of the companies is reported to be in the final stages of
utilising their allotted quotas.
Speaking to IM, APMDC’s
general manager, Sri Ramakrisna, said: "We are on the verge of
successful completion of the barite tender process conducted
earlier this year. On the expiry of the six month period
[30November], we will announce a new tender for barite."
Ramakrisna added that the government run agency has not yet
finalised the details of the new tender, but hinted that the
upcoming auction would be for one year contracts. When
questioned about the floor price of the tender, APMDC declined
to comment, but admitted that the barite industry is facing
tough market conditions in light of stagnating oil prices and
declining production of crude oil.
In order to address the non-participation of foreign
companies in the last tender process, APMDC said it plans to
introduce special provisions in the forthcoming bidding round.
The agency indicated that it will make barite available on an
FOB basis from three Indian ports to attract international
bidders. Bidding in the last auction was based on ex-mine
According to industry sources, international companies
stayed away from the last tender because of what they
considered to be problematic logistics and infrastructure for
carrying out barite mining in Andhra Pradesh. Foreign
businesses find it difficult to operate in Indian territories
due to excessive bureaucracy and the number of licences and
permits needed to run mines.
None of the successful bidders which participated in the
latest tender were prepared to comment publicly on what they
considered to be appropriate benchmark prices for barite in the
new auction, but most confessed to IM
privately that there should be a downward revision of around
12-15% in prices in order to reflect the weak conditions in the
global oilfield industry.