CEC refuses to direct NMDC to reduce iron ore prices

Out of 70 sponge iron units in Karnataka, 50 closed due to high cost of raw material, remaining running partially

The Supreme Court-appointed Central Empowered Committee (CEC) on Wednesday refused to intervene in matters pertaining to pricing iron ore put on e-auction by the miners. It also refused to issue any directions to iron ore producers on producing certain type of ore, which will be beneficial to user industries like sponge iron manufacturers.

Responding to a plea from Karnataka-based sponge iron manufacturers’ for directing NMDC to reduce the price of their lumpy ore sold through the e-auctions in Karnataka, the CEC said, “We will not intervene in internal issues of NMDC nor we will enforce on anybody. We do not understand the market dynamics and we have no mandate to direct them on bringing down the prices.”

At a meeting with the iron ore producers, steel and sponge iron manufacturers in the presence of officials of department of mines and geology, here, the CEC team clarified that they are not responsible for fixing prices and they cannot direct the miners to reduce prices, industry sources said.

The representatives of Karnataka Sponge Iron Manufacturers Association (KSIMA), who were present at the meeting, requested for directing NMDC to produce lumpy ore with certain sizes suitable for use in sponge iron making. They also wanted the prices of lumpy ore to be reduced as it was not economical for them to buy at high prices or even use pellets for making sponge iron.

However, the CEC directed the KSIMA representatives to submit the details of the iron ore procured from mining companies through legal sources prior to the imposition of ban on mining in Karnataka, so that they can study the matter and consider directing miners to reduce the prices, only to benefit sponge iron makers.

Currently, out of 70 sponge iron units in Karnataka, 50 are closed due to high cost of raw material and the remaining are running partially.

The steel industry representatives also appealed to CEC for intervention in the e-auction procedure and direct NMDC to reduce the prices for iron ore lumps unsold in the last several rounds of e-auctions.

Currently, about 2-3 million tonnes of iron ore lumps put on e-auction by NMDC are left unsold in the last few months. It is estimated that NMDC is having a stock of 1.4 million tonnes of lumpy ore at its stockyards.

As regards to renewal of mining leases, which have expired recently, the CEC said that it will look into details case by case basis and fast track the process. It also directed the Monitoring Committee to release 90% of the iron ore price sold at e-auctions to miners directly.