Steel mills will have to wait for Karnataka ore

The steel mills in Karnataka which participated in the e-auction of iron ore last week will have to wait a bit more to get physical delivery.

Public sector MSTC Ltd, which held the e-auction, is yet to put in place the required software for issue of transport permits to the successful bidders. This delay is expected to hurt small and medium-sized mills in Karnataka, grappling for six months with an ore availability problem.

The monitoring committee appointed by the Supreme Court to oversee the process of e-auctions has to enable installation of the software on the MSTC website. The process is likely to take till September 21. After this, the department of mines and geology (DMG) will start issuing the mineral dispatch permits to successful bidders, after they pay royalty and forest development tax, industry sources said.

“This is the first time that iron ore was auctioned in Karnataka. There is a need to install software that will monitor the issue of permits to the right bidder. Earlier, the permits were issued to a particular miner to take out ore from his own mine. Now, the transport permits are going to be issued to the users directly,” sources said.

By the terms, the successful bidders are required to transport the material allotted to them within 20 days from the day of issue of permit.

The deputy commissioner (DC) of Bellary, the district at the core of the mining issue, held a meeting yesterday with all bidders and explained the precautions to be taken before transporting the ore to their respective factories. Based on the recommendations of the monitoring committee, the DC has imposed several restrictions on the companies while transporting the mineral. The bidders have been told to strictly adhere to the environment laws while doing so, the sources said.

“The committee has prepared a list of 27 tainted transporters and handlers, and instructed the bidders not to use the services of these operators while transporting the material,” sources said.

The companies have been asked to register with the DMG the registration number of lorries used for transporting the ore. The committee has also asked the bidders to furnish details of the route map from the mine head to their steel plant.

They are to also give an affidavit that they’d not use the ore for export, reselling, trading or any other use other than their own requirements at sponge iron, pig iron or steel plants.