Karnataka set to auction low-grade ore next week

There's good news in store for Karnataka's ore-starved steel industry. The Supreme Court-appointed Cental Monitoring Committee (CEC) is set to e-auction low-grade iron ore dumps. On June 26 or 27, the panel is likely to auction about 6,00,000 tonnes. The move would provide relief to the steel industry, operating at low capacities due to a raw material shortage.

Recently, the CEC had approved e-auctions of iron ore dumps. Though the monitoring committee has estimated the dumps in Bellary district at 7-10 million tonnes (mt), according to industry estimates, these could exceed 20 mt. While some mine owners have declared their dumps, many are yet to do so.

Official sources said members of the monitoring committee were visiting each of these mines and taking stock of the dumps available. According to the committee's preliminary assessment, about 6,00,000 tonnes of dumps are available at the Sandur Manganese and Iron Ore Enterprise mines, and these would be auctioned next week.

The committee is yet to fix the base price for the dumps. Officials said this would be announced prior to the auction. "The process of auctioning dumps is taking a lot of time, as the monitoring committee has to consider various aspects, such as environmental issues. Also, it has to assess the quality of the ore. Through the next three to four months, the entire process would be completed and the material auctioned," sources close to the auction process told Business Standard.

The monitoring committee has decided that unlike regular iron ore auctions (various auction rounds of 4,000 tonnes each) for low-grade dumps, the entire stock from an individual mine would be auctioned at one go. Sources said the entire amount being auctioned would have to be bid by a single buyer. The CEC was authorised to retain the auction proceeds if the mine owners didn't declare their dumps in the monthly returns, they added.

The quality of ore in the dumps varies from 45 to 50 per cent Fe, and the ore is considered to be low-grade and not suitable for steel making directly. Before using it as raw material, steel mills would have to beneficiate this ore.

JSW Steel would be the biggest beneficiary of low-grade dumps, as it has installed large-capacity beneficiation plants, as well as technology to use low-grade iron ore. The company has three beneficiation plants, with a combined capacity of 20 mt. So far, the company has used iron ore of up to 52 per cent Fe. Now, it plans to use up to 46 per cent Fe. Steel companies such as BMM Ispat and Kirloskar Ferrous also have beneficiation plants for low-grade iron ore.

BOOSTER DOSE
|Monitoring committee likely to auction about 6,00,000 tonnes on June 26 or 27
|Panel estimates dumps in Bellary at 7-10 mt; industry estimates it at more than 20 mt

|Monitoring committee members are visiting the mines and taking stock of the dumps
|The entire stock from an individual mine would be auctioned at one go
|The entire amount being auctioned would have to be bid by a single buyer