State-owned NMDC has ramped up iron ore production from Karnataka up to 30,000 tonnes per day to meet the shortage faced by iron and steel making units in Southern India, a senior company official said today.
"At present, we are producing in the range of 28,000 to 30,000 tonnes a day. We can increase it to 35,000 tonnes per day but the rains are playing spoilsport," NMDC Director (Finance) S Thiagarajan told PTI.
NMDC is the only company permitted to mine iron ore from Karnataka by the apex court, which imposed a ban on mining in the state due to large-scale environmental degradation of the mining areas.
The apex court had allowed the Navratna firm to mine one million tonnes (MT) of iron ore per month (or 12 MT in a year) from the state, which translated to about 33,500-34,000 tonnes of ore per day.
"It will take us a week's time to ramp it up to the desired level once rains in the region stop," Thiagrajan said.
The move, together with e-auction of iron ore stocks in the state, is expected to ease the demand of vital steel making raw material in the state, he added.
"What we produce may not be sufficient as the demand is much more than our production. So, the auctions will ease the situation."
According an estimate of Bangalore Chamber of Industry and Commerce (BCIC), daily demand of Karnataka's iron and steel units is about 1,04,000 tonnes and many units have closed their operations due to paucity of the ore.
The apex court, while banning the mining in state, had permitted to auction 1.5 million tonnes (MT) iron ore per month through e-auction route from the stock of 25.88 MT, lying at the mines in the state.
The first round of auction was conducted on September 14 for about 4,00,000 tonnes.
When asked about the supplies, Thiagarajan said that about 35% of iron ore production from the state is being supplied to sponge and pig iron units of Karnataka and other neighbouring states.
"We have kept almost our entire production of high grade iron ore (lumps), accounting for about 35% of total production, for smaller units, who are mainly sponge and pig iron units in Karnataka, Goa, Andhra Pradesh and Tamil Nadu," the NMDC Director Finance said.
He further said that supply of iron ore has been decided as per the requirements of industry and the demand is being met in smaller quantities.