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Karnataka to extend support for steel players

Steel, pig iron and sponge iron manufacturers in Karnataka can now heave a sigh of relief and hope for better days ahead as the state government has agreed to widen the window for transporting the iron ore purchased at the electronic auctions.

At present, the Monitoring Committee, appointed by the Supreme Court to oversee the auctions, has restricted the transportation of iron ore to 12 hours, from 6 am to 6 pm.

“The Karnataka steel manufacturers association had requested the state government to permit the movement of iron ore round the clock. Considering that the delay in the transport of iron ore is affecting production, the committee has agreed to extend the timings from the present 12 hours to 16 hours,” Vinod Nowal, chief executive officer and director, JSW Steel Limited, said.

He said the matter was before chief minister, D V Sadananda Gowda, for his approval. “Unless the government allows transportation of the raw material round the clock, it would be difficult to maintain the production levels and we cannot shut down the furnaces,” he said.

Nowal said of the 4.4 million tonne iron ore won by JSW at the e-auctions, the company could hardly move 1.2 million tonne due to the restrictions. Another 3.2 million tonne iron ore continues to lie at the various mine heads. This has affected the company’s production which is now 50-60 per cent of the installed capacity of 10 million tonnes. The company was hoping to restore the production levels to 80 per cent by the end of October.

As per the new system drawn up by the state’s Department of Mines and Geology (DMG), the successful bidders are issued bulk permits after they pay the royalty, forest development tax and VAT for the ore won at the auctions. Subsequently, they have to get their respective holograms and tripsheets from the deputy director of mines and geology before loading the ore. They can then secure the forest permit from the department of forests before moving the material to their respective steel mills.

The monitoring committee has so far facilitated the auction of 7 million tonnes of iron ore of the 25 million tonnes stockpile lying at the various mines, as allowed by the apex court.

However, he said, the stockpile would not be sufficient for the steel companies to operate their plants in the long run. There is hence a need to resume regular mining in the three districts of Bellary, Chitradurga and Tumkur. The stockpiles are expected to last another six months.

“It is the right time to resume regular mining and unless that happens we cannot ensure non-stop flow of the raw material to steel mills. But, it depends on the state government which is yet to submit the rehabilitation and resettlement plan to the apex court,” Nowal added.