Hon’ble Supreme Court of India gave a mandate to present Monitoring Committee based on CEC recommendation, to regulate Iron ore e-auction sale process in Karnataka for an initial period of two years, due completion on 12 Apr, 2014.
A hearing that was scheduled on 31st Mar, 2014 to announce the future course of Iron ore sale, has been postponed and the next date is yet to be known. Irrespective of the verdict’s outcome, there is high uncertainty over Iron ore availability.
Lack of clarity on the issue is causing lot of ambiguity over Iron ore allocation in Karnataka sector over the coming days. If the decision does not happen to take place by end of this month, there are serious implications for the industry. There is no precise indication of e-auction to happen in the interim period till the new mechanism is put in place.
Any further deferment will create trade issues for Karnataka based steel producers, who are contingent to 100% Iron ore from e-auction since 11 Sep, 2011. Summer vacation, 2014 of Supreme Court from 12 May-29 June might delay the judgment further.
SteelMint understood from industry experts that open/direct sales between buyer and seller of Iron ore might get preference and may be permitted by the Court.
SteelMint research states that 29.2 MnT of Iron ore was sold in Karnataka through e-auction in the last fiscal. The leading buyer JSW Steel purchased 58.8% of total material, followed by BMM Ispat, Xindia Steels, MSPL and RB Seth.
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