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Ore-starved iron and steel
manufacturers in Karnataka are set to get a much-needed relief this week, with
the state government allowing the release of a higher quantity of iron ore from
the existing stockpile through e-auction.
The Supreme Court-appointed
monitoring committee, which is supervising the electronic auction of iron ore
in Karnataka, has decided to put up 4 million tons (MT) of ore for bids in
October. Of this, 2 mt would be auctioned tomorrow. A stockpile of 25 mt has
been lying at various mines in the state. Tomorrow's auctions will the third
one. A total of 1.24 mt was sold through the two auctions in September.
The move comes after the iron and
steel industry pleaded with the Karnataka chief minister for supply of at least
2.5 mt of iron ore a month.
The Karnataka Iron and Steel
Manufacturers Association (Kisma), led by JSW Steel vice-chairman and Managing
Director Sajjan Jindal, had recently urged the government to conduct e-auctions
every day or on alternate days to ensure a continuous supply of the raw
material for their furnaces.
The decision to release a higher
quantity through e-auctions would help the sponge iron, pig iron and steel
mills, which are dependent on iron ore from Karnataka, to restore normal
production. The iron and steel industry was on the verge of closure due to the
severe shortage of iron ore following the suspension of mining activity after a
direction from the Supreme Court.
According to Kisma, the industry
in Karnataka requires 104,000 tons per day an average, while the supply was
20,000 tones, as only NMDC was allowed to operate its mines.
“During the first two auctions,
held on September 14 and 29, we had auctioned 1.24 mt at an average rate 20 per
cent higher than the base price. Of the 40 bidders listed with NMDC, 16 were
successful in the second auction. The ore will be made available to steel mills
dependent on the ore from NMDC’s mines in Bellary on a priority basis,” H R
Srinivasa, director, Department of Mines and Geology, Karnataka said.
Srinivasa said the second auction
saw sale of 932,000 tones and generated Rs 227 crore at an average sale value
of Rs 2,500 a tonne.
He said about 2 mt would be put
up for bidding in the third round tomorrow. This includes about 232,000 tons
from the NMDC mines. The Supreme Court, in its order on September 23, had
ordered that iron ore from NMDC mines could be released through e-auctions.
However, Srinivasa ruled out the possibility of conducting e-auctions on a
daily or alternate-day basis, as demanded by Kisma. Kisma also demanded that
the government open iron ore mines that were found legal and within the
regulatory framework by the Joint Inspection Committee appointed by the apex
court, to enable a continuous supply of iron ore to the industry.
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