Sesa, JSW trade charges on price

The war of words between steel and mining firms in Karnataka have escalated over prices of iron ore with two largest firms, Sesa Sterlite and JSW Steel, accusing each other of misusing market dominance and forming cartels.

Leading private iron ore producer Sesa Sterlite alleged that JSW Steel, the largest steel producer in Karnataka, is manipulating prices of iron ore by misusing its dominance in the local market. Terming the allegation as false and baseless, JSW Steel said that Karnataka mining firms are promoting “greed” by unfairly fixing higher iron ore prices and propagating misleading and baseless information to divert attention.

Other two major buyers Kalyani Steel and BMM Ispat account for next 12 per cent of total sales, he said. “First, they allow smaller companies to buy in the auction. Once appetite of the smaller firms is over, raja baitha hai khane ke liye (the bid daddy is here to manipulate),” he alleged.

On the allegations, JSW Dy Managing Director Vinod Nowal said, “What is claimed is false, untrue and baseless.”

If price can be manipulated by few steel companies, as falsely alleged, the iron ore should have been sold at base price. But it did not happen.”

Nowal said that the base price itself is unfairly fixed which is double of what NMDC is offering. “This unjust act is done only with an intention to promote their greed by taking advantage of distress the steel industry is undergoing due  to severe shortage of iron ore.”

Since the fixation of base price at Rs 5,000 per tonne is the final nail in the coffin, the steel companies has no option but to make all the stake holders aware of these misdeeds of certain private mining companies, he said. The charges levelled by the two companies have come against the backdrop of Sesa Sterlite fixing the base price of its iron ore fines, having 61 per cent Fe, at Rs 5,000 per tonne in the last e-auctions, held on January 31.

This action led to steel producers in Karnataka alleging cartelisation last week by the mining firms. The miners had retorted by making counter allegation of cartelisation by steel firms.