On 3 Dec, looking after the imbalance in supply and consumption of iron ore in the country, steel ministry filed an application to Supreme Court, urging to raise Iron ore production in Karnataka up to 50 MnT annually.
“India is currently 4th largest producer of steel in the world, and soon by 2017 would likely to become the 2nd largest producer, if the capacities are utilized at its optimum, but the industry has suffered on account of regional shortage, particularly in Karnataka,” the application narrated.
32 Sponge Iron plants have already stopped operating, and currently only 17 mines in the state are in operation, which has contributed to 6.5 MnT of Iron ore production during April to September and is expected to touch only 16 MnT at the end of this FY.
Presently, Indian steel industry is witnessing its all time low capacity utilization of 81%. Earlier Karnataka use to be major contributor in iron ore, the shortage here has also become key reason in this low capacity utilization.
In its application the Karnataka government has pleaded permission from the highest court to allow to raise their annual production to 40MnT from the existing production of 30 MnT and to execute few fresh leases in Bellary, Tumkur and Chitradurga districts to produce additional 10MnT to meet the industry’s demand.
The steel ministry in an intervention application has now provided direction to the Karnataka government, Central Empowered Committee and monitoring committee, to speed up the opening up of all categories A and B mines in a certain time-bound manner.
According to trade sources, the state has a permissible limit of 30 million tonnes but actual production will land somewhere around 15-17 million tonnes in 2013-2014. Out of which 9 million tonnes will be coming from NMDC and rest 6-7 million tonnes from A and B grade mines.
Meanwhile, sub grade iron ore (very low grade and not freshly mined) have been put on E-auction. Total quantity of sub grade material is expected to be around 10 million tonnes but it cannot be used by many steel makers in the state as they do not have technologies to use such low grade iron ore.
Karnataka in its application also wanted direction to the state government to complete the process of auctioning C category mines.
– Sourced
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