Karnataka Steel Industry Increase Iron Ore Supply after Supreme Court Banned Mining

Karnataka's steel industry Wednesday sought the state government's intervention to increase iron ore supply severely hit after the Supreme Court banned mining in the state following the multi-crore scam and damage to the environment in the mineral-rich region.

'We have asked Chief Minister D.V. Sadananda Gowda to prevail upon the apex court for increasing the quantum of iron ore being auctioned online (e-auction) to meet the shortage,' industry representative and JSW Steel managing director Sajjan Jindal told reporters here.

At a meeting with Gowda and officials, the industry urged the government to supply the ore through the state-run NMDC Ltd (National Mineral Development Corporation) under long-term supply contract and conduct the e-auction on daily or alternate day basis instead of fortnight currently.

'The government should ensure supply of 2.5 million metric tonnes of iron ore per month at market price to the industry and open up mines, which the apex court appointed joint inspection committee found legal and within the regulator framework to increase the production,' Jindal said.

In accordance with the apex court's directive, 25 million tonnes of unsold iron ore stock has to be sold through e-auctions for domestic consumption only.

In the first e-auction held Sep 14, of the 396,000 tonnes put for bid, only 272,000 tonnes was sold as the price fixed for various grades of the ore was found to be costlier by the industry.

'The Supreme Court-appointed monitoring committee has agreed to put higher quantity of ore on bid and hold the e-auctions more frequently than every fortnight,' Jindal observed.

The next round of e-auction is due Thursday.

Assuring of the government's support to the steel firms, Gowda said a committee had been set up to address the industry's concerns, including supply of higher quantity through the bid and price the ore on a competitive basis.

'The state government will soon file a petition in the Supreme Court to increase the supplies and lift the ban on mining to bail out the industry from the grave crisis it is facing,' Gowda told the industry representatives.

The industry also urged the state government to expedite the rehab process and reforestation in the mining areas to enable the apex court to revoke ban on mining operations.

Lauding the apex court for stopping illegal mining and protecting the region's environment, Jindal said though the cleansing of the system was a welcome move, the industry should not suffer for want of the precious raw material.

'The steel industry, which has invested about Rs.50,000 crore in the region, requires 100,000 tonnes of iron ore per day and 2.8 million tonnes per month. With supplies drying up, many plants have shut down and 200,000 people are rendered jobless,' Jindal added.

Category: Iron Ore, iron ore commodity, iron ore mining, iron ore supply, karnataka iron ore, karnataka steel industry, mining ban 2011