Iron ore sales through e-auction in Karnataka had started on 14 Sep 2011, after the Supreme Court put a ban on mining. E-auction Iron ore sales might not continue April, 2014 onward.

According to sources, e-auction process of Iron ore sales has to stop w.e.f 13 Apr 2014. 28.3 MnT Iron ore has been sold from 01 Jan, 2013 to 13 Jan, 2014 in Karnataka e-auction.

The following outcomes are likely to happen:

• The date might be extended further
• State government might monitor e-auction process in future
• E-auction sales of Iron ore might continue until  production is achieved to 30 MnT pa

Sources said that open sale of Iron ore might not be allowed, which otherwise could have benefited buyers. Though, price trend speculation is difficult at the moment, chances are high that miners might not offer cheaper raw material in the beginning.

Industry perceives open sales as a better economic scenario & governance, where transparency and certain basic principles required, will be followed. Presently, in addition to sale price, the buyer has to pay royalty (at 10% of the market price), forest development tax , sales tax, cess and other applicable charges.

The Supreme Court had imposed ban on recommendations of the Central Empowered Committee (CEC)  which stated illegalities, on environmental grounds. According to the Supreme Court order dated on 26 Aug 2011, 25 MnT of existing Iron ore stock was allowed to be sold through e-auction. NMDC is allowed to mine 1 MnT pa Iron ore from Donimalai & Kumarswamy mines in Karnataka.