News and Events

Situation likely to worsen in Karnataka

Business Standard reported that the scarcity of iron ore is set to worsen in Karnataka in the next one or two months, as the ore sold through E auctions is depleting fast.

Of the 25 million tonnes of stockpile earmarked for auctioning, the monitoring committee supervising the auctions has so far released only 15 million tonnes.

Till now, 33 rounds of auctions have been conducted. In March, another 2 million tonne are going to be auctioned.

With a majority of the remaining 10 million tonnes being low grade (around 52 to 54% Fe content), iron and steel manufacturers may find it difficult to continue production.

The steel industry is of the opinion that it might have to shut operations if the Supreme Court does not allow resumption of regular mining immediately.

Mr Seshagiri Rao joint managing director and group chief financial officer of JSW Steel said that “Even after paying higher prices in e auctions, the availability of quality iron ore is a challenge, threatening the continuation of steel production efficiently. The steel industry in Karnataka is not only facing shortage of iron ore but poor quality of iron ore is impacting the equipment, productivity and efficiency.”

Mr RK Goyal MD of Kalyani Steels said that “We are largely using caliberated ore in our steel plant and already the stocks are over. We have very limited quantity available with us and we cannot use the low-grade ore. It is the end of the road for us if the Supreme Court does not permit resumption of mining in the near future.”

Mr DV Pichamuthu director south of Federation of Indian Mineral Industries said that “We do not know at this stage what conditions the court will impose on miners. As it is, we have to put in place a rehabilitation and resettlement plan. We have been asking the court to give permission for Category A mines to restart immediately.”

The preparation of an R&R plan as recommended by CEC is likely to take more time and unless this is done the court will not approve mining, industry sources said.