The electronic auction of iron ore stocks in Karnataka, as directed by the Supreme Court, will begin from September 14 and iron and steel producers have been invited to register for it, officials said.
"The first auction will be conducted on September 14," said an official of the MSTC, which has been entrusted with the responsibility of conducting e-auctions by the apex court.
An official of Karnataka's Mines and Geology Department also confirmed the development, while adding that "iron and steel units have been invited to register for the e-auction on September 14".
The official further said, "Initially, auctions will be 12,000 tonne per week [for different grades of iron ore], while the target is to increase it to about 40,000 tonne a day".
This will gradually be raised to the Supreme Court directed levels of 1.5 million tonne a month, the Karnataka state government official added.
When asked about the next round of auctions, after September 14, the official said, "It will depend upon the situation. It can be once in a week or thrice in a month".
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Talking about the price of the iron ore, the state government official said that it will be based on prices prevailing in the markets of China/Japan sans export duty and transportation costs to the ports.
The domestic taxes will, however, be applicable, the official added.
The auctions are expected to provide a temporary relief to the iron and steel industry in the state, which has been reeling under severe shortage of iron ore following a mining ban imposed by the apex court in Bellary, Tumkur and Chitradurga districts earlier.
The apex court, while banning the mining due to large scale environmental degradation of area, had permitted to auction 1.5 million tonne (MT) iron ore per month through e-auction route from the stock of 25.88 MT, lying at the mines in the state.
Besides this, a 3-member monitoring committee, headed by Additional Principal Chief Conservator of Forest Deepak Sharma, was constituted to deal with sale and transportation of the existing stock of iron ore and maintain account of the sales proceeds.
Moreover, MSTC Ltd, a mini-ratna PSU specialised in e-commerce, was entrusted to do the auctions.
According to industry sources, the monitoring committee is currently concentrating on stocks in mines of Bellary, which are estimated at 14 MT.
Auctions for stocks from mines of Chitradurga and Tumkur are likely to begin after two months, industry sources added.
Besides Bellary, the mines in Chitradurga has around 7 MT of iron ore stocks, while Tumkur has a stock of 4 MT, the apex court appointed Central Empowered Committee (CEC) had said in its report.
According to the Bangalore Chamber of Industry and Commerce (BSIC), daily demand of iron ore in the state is around 1,04,000 tonne.
Of this, about 26,000-27,000 tonne of supplies for the raw material is met through NMDC -- the only company permitted by the apex court to do mining in the state.
Due to paucity of iron ore, many sponge iron plants have shut their operations, while leading steel and iron producers like JSW Steel, MSPL, BMM Ispat, Sathavahana Ispat, among others, have resorted to operating at reduced capacities.
Karnataka produces 16 MT of iron and steel in a year, which is a little less than 25% of the country's total production.
The state also produces more than a fifth of India's total iron ore production, which is around 220 MT annually. Of this, about 80% comes from Bellary-Hospet region at about 40 million tonne per annum, Tumkur and Chitradurga districts meet rest of the requirements.