Iron ore e-auction yields Rs 3,355 cr

This excludes royalty charged on the mineral, forest development tax and other taxes payable to the state govt

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 Ltd. 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 (mt) of iron ore in the state for the past year as directed by the apex court.

On September 2, 2011, the Supreme Court had allowed e-auction of 25 mt 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 one mt 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 mt of iron ore, including about 2.94 mt of sub-grade iron ore and whose sale value is likely to be about Rs 321 crore (at the rate of Rs 700 a tonne for 2.94 mt of sub-grade iron ore and Rs 2,500 a tonne for 460,000 tonnes).

At 10 per cent 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 provides for retaining 10 per cent of the sale price for mineral that would be produced after resumption of mining operations, a formal decision regarding retaining 10 per cent of the sale proceeds of the existing stocks of Category A mining leases by the court is awaited.

From 15 per cent 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 2.28 mt of balance stock of iron ore is estimated to be available for sale, including sub-grade iron ore.