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Iron ore-starved steel manufacturers like JSW Steel, BMM Ispat and Kalyani Steel among others, which are operating their mills on a thin supply of iron ore for the last few days, are likely to get additional supply of raw material before the regular mining starts in Karnataka.
The Monitoring Committee, appointed by the Supreme Court to conduct electronic auctions, is likely to make available an additional 2.5 million metric tonnes from the stockpile in the next few days. The committee, till now, sold 24 million metric tonnes of iron ore out of a stockpile of 25 million metric tonnes.
The regular mining is likely to be delayed for a couple of months more in Karnataka with majority of 18 Category A mines yet to secure several statutory approvals as ordered by the Apex Court.
JSW Steel is currently operating its 11 million metric tonne per annum steel plant in Toranagallu at 80 per cent of its capacity, while BMM Ispat and Kalyani Steel are operating their steel plants at little over 50 per cent of the installed capacity in Karnataka.
According to fresh estimates, there is an availability of additional 2.5 million metric tonnes of iron ore at various mines in the state, which can be put up for auction, the state government sources said. It is estimated that steel industry might have to rely on stockpiles for another two months before the fresh ore comes to the market.
In addition to this, with about 700,000 metric tonnes of ore coming from state-owned NMDC every month, the steel makers like JSW Steel, BMM Ispat, Kalyani Steel, Kirloskar Ferrous Industries and MSPL among others have survived at a lower capacity since one year.
“We have started re-estimation of iron ore stocks at various mines in the state. As per our initial estimates another 2.5 million metric tonnes is likely to be available for auctions. We will know the exact data after completing the fresh assessment of the left over stocks at the mine heads,” Karnataka government sources told Business Standard.
The Supreme Court, after imposing temporary ban on mining in the state in July 2011, had ordered for electronic auction of about 25 million metric tonnes from the stockpiles to help the steel, sponge and pellet makers to tide over the crisis in August last year. Since then, the industry is depending on that ore.
Recently, the Supreme Court allowed resumption of regular mining by 18 Category A mines (those with no or negligible illegalities). However, only one mine, Mineral Enterprises Limited has all statutory approvals in place and commenced regular mining from last Thursday. The company is likely to produce around 200,000 metric tonnes in the next one month out of 380,000 metric tonnes ceiling fixed by the Central Empowered Committee (CEC).
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