Tuesday, Aug 09,
The steel sector at present is reeling under pressure. Both internal and external such as fear of global slowdown, iron-ore ban and coal-linkage issues is likely to hit the margin of most Indian companies.
The recent partial lifting of the ban in Karnataka may just be a temporary relief to the steel industry as the requirement of iron ore is much higher than what is currently allowed. Moreover, companies like Kalyani steel which do not have a long term contracts with NMDC are still not able to get the raw material and as a result have kept their plants closed.
According to JSW, the current production of iron ore in the rest of Karnataka is 7-8 mtpa. The total availability of iron ore in Karnataka will be only 19-20 million tonnes including the proposed 12 million tonnes from NMDC in Bellary district, against the industry requirement of 33 million tonnes thus meeting only 60 per cent of requirement.
According to RK Goyal, managing director, Kalyani Steel, We have very serious problems in Karnataka today in relation with illegal mining and the ban by Supreme Court on mining and transportation. We believe in another one to two weeks, many more mines will be permitted to mine the product and the product will be available. Otherwise, like today; we are almost closed; it will be a very big setback for us as well as all the steel industry in Karnataka.
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