MEL gets nod to auction 6.7 mn ton low-grade iron ore

The move comes as a big relief to ore-starved steel mills in Karnataka

Even as the resumption of regular mining is getting delayed in Karnataka, there is some good news for the ore-starved steel industry as one of the Category A mining company has got approval to put on auction some of its low-grade iron ore.

The Bangalore-based Mineral Enterprises Limited (MEL), which operates mines in Chitradurga district and is classified under Category A, has been permitted by Supreme Court appointed Monitoring Committee to put on auction about 6.7 million metric tons of iron ore.

“We have been dumping very low-grade iron ore in one of our mines in Chitradurga district for over 20 years. We have recently got approval to off-load this ore and it has been classified as low-grade iron ore (with 51-52 per cent Fe grade). Till now, we have managed to auction 6.1 million tonnes and 4.9 million tonnes have been despatched,” Basant Poddar, managing director, MEL told Business Standard.

He said the company would dispatch about 20,000 tonnes per day and clear the stock over the next three months. The company has managed to secure an average Rs 756 per tonne at the e-auctions for this ore.

Poddar said the company has set up railway sidings up to its mine heads in Chitradurga and it can evacuate the dumps easily.

It may be noted that the iron ore-starved steel industry had been seeking release of low-grade iron ore in the state to tide over the shortage. Though there are not many companies that can make use of very low-grade iron ore in the country, some of the companies like JSW Steel, BMM Ispat, MSPL and Janaki Steel are equipped to beneficiate the low-grade iron ore and convert it into pellets, the steel industry sources said.

The steel industry in and around Karnataka, that is dependent on iron ore from mines in the state, require about 32 million metric tonnes of iron ore per annum. JSW Steel alone, which operates an 11 million tonne per annum steel plant in Bellary district of Karnataka requires about 20 million metric tonnes per annum.

Meanwhile, four mining companies in Category A have resumed mining and bring to the market about 2 million metric tonnes of iron ore. They are B Kumar Gouda, Tiffin Barytes, E Rama Murthy and Nadeem Minerals. Another firm, VESCO has also secured all statutory approvals and is awaiting final clearance from the state department of mines and geology to commence mining.

The Monitoring Committee has till now facilitated e-auction of about 32 million metric tonnes from the stockpile following the Supreme Court direction. At present, the steel mills are surviving on the auctioned material and most of them are working at half of their installed capacities.