E-auction of iron ore yields Rs 3,355 cr in K'taka

Still 3.4 mn tonnes of iron ore is left for e-auction

The Supreme Court appointed Monitoring Committee to supervise the e-auction of iron ore in Karnataka has realised about Rs 3,355 crore from sale of the existing stock of iron ore of Category A mining leases and the production from the two mining leases of NMDC Limited. This excludes royalty charged on the mineral, forest development tax and other taxes payable to the state government.

The Committee has been managing the e-auction of about 25 million tonnes of iron ore in the state for the past one year as directed by the Apex Court.

On September 2, 2011, the Supreme Court had allowed e-auction of 25 million metric tons from the stockpile to enable steel mills source raw material for their blast furnaces after banning mining in its July 29, 2011 order. It had also allowed NMDC to mine up to 1 million tonnes per month and sell it through e-auctions.

According to a latest report of the Central Empowered Committee (CEC) of the Supreme Court, there is a balance stock of about 3.4 million tonnes of iron ore, including about 2.94 million tonnes of sub-grade iron ore and whose sale value is likely to be about Rs 321 crore (at the rate of Rs 700 per tonne for 2.94 million tonnes of sub-grade iron ore and Rs 2,500 per tonne for 460,000 tonnes).

At 10% of the sale value the total amount received / receivable by the Monitoring Committee would be about Rs 367.62 crore.

While the Apex Court’s order dated April 17, 2012 provides for retaining 10% of the sale price for mineral that would be produced after resumption of mining operations, a formal decision regarding retaining 10 % of the sale proceeds of the existing stocks of Category A mining leases by the court is awaited.

From 15% of the sale proceeds of the existing stock of iron ore pertaining to the Category B mining lease an amount of Rs 1,650 crore has been realised as sale value of the existing stock. In addition, about 2.279 million tonnes of balance stock of iron ore is estimated to be available for sale, including sub-grade iron ore.

The estimated sale value of the existing stock of iron ore is about Rs 456 crore (at the average rate of Rs 2,000 per metric ton of iron ore including the sub-grade iron ore).

The Monitoring Committee has realised about Rs 953.35 crore as sale value of the existing stock of iron ore pertaining to Category C mining leases. In addition about Rs 142.80 crore is estimated to be the sale value of the balance existing stocks of about 714,000 tonnes of iron ore.