With barely eight million tonnes (mt) of iron ore left for auction in Karnataka, sufficient to fire the steel mills’ furnaces for two months, iron and steel companies in and around the state, including JSW Steel and Kalyani Steel, are in dire need of the key raw material.
In the absence of regular mining, they expect the Supreme Court to give a nod for auctioning another two to four mt of additional ore stored at various stockyards of miners and private traders. The apex court is resuming the hearing on the illegal mining case tomorrow.
According to officials in the department of mines and geology (DMG) and mining companies, there is a possibility of bringing in an additional two to four mt of ore under the electronic auction platform.
There are 58 stockyards maintained by both miners and private iron ore traders across the state, where some quantity of ore is stocked. This is in addition to the 25 mt of stockpile being sold through e-auctions as directed by the apex court. However, it is yet to be ascertained what grade of ore is available at these stockyards, mining industry sources told Business Standard. “We have measured the availability of ore at various stockyards and sent the list to the head of office at Bangalore for further action,” DMG officials in Bellary said.
Regular mining is yet to be allowed by the Supreme Court.
“The Supreme Court permission is necessary to bring any additional ore under the e-auction process and we hope the court would give permission for bringing additional ore if it is available,” said R K Goyal, managing director, Kalyani Steel.
Of the 25 mt of stockpile available for sale through auctions in Karnataka, the monitoring committee, appointed by the Supreme Court, has till now released 17 mt. Of the remaining eight mt, only about two mt is medium grade (between 54 per cent and 63 per cent Fe grade), while the balance five mt is very poor grade, which is unfit to be used by the domestic steel mills.
State-owned NMDC, which has been allowed to conduct mining, has so far sold 3.6 mt through the auction.
The committee is releasing another 1.4 mt on April 20 and 21 through e-auction. Another 1.4 mt is likely to be released for auction towards the end of April. However, the steel industry does not expect the stock to last beyond another two months.
Meanwhile, the base prices of ore, slashed by 10 per cent at earlier auctions, have been raised by five per cent for tomorrow’s auction. The base price for 63 per cent Fe grade iron ore fines is fixed at Rs 2,550 a tonne, while same grade lumps is at Rs 3,495 a tonne.
Supported by a firming trend overseas and a pick-up in spot demand, lead futures prices today traded higher by 0.67% to Rs 112.60 per kg.