 "Karnataka steel industry alleges cartelisation")
Four industry bodies representing the steel and sponge iron industry in Karnataka alleged "cartelisation" by eight mine owners in the state, including Vedanta subsidiary Sesa Goa, to distort iron ore prices in the ongoing e-auctions.
"Since April 2013, private mining companies have been setting floor price at the e-auctions of the ore much higher than the actual reasonable price. Floor price for 61 Fe grade ore, which should not be more than Rs 2,500 a tonne, has been set at Rs 5,000 a tonne," Karnataka Iron and Steel Manufacturers Association (KISMA) President Vinod Nowal, who is also the deputy managing director at JSW Steel, said at a press interaction here. The interaction was organised by Karnataka Iron and Steel Manufacturers Association (KISMA), Bangalore Chamber of Industry and Commerce (BCIC), Karnataka Sponge Iron Manufacturers Association (KSIMA) and Association of Indian Mini-Blast Furnaces.
"There are seven-eight mining companies which are included in the list of Category-B mines, as classified by the Supreme Court who have been doing this," Nowal said. The industry bodies showed a presentation highlighting names of six companies categories in the B category, including Sesa Goa, Chowgule & Company, Balaji Produce Company, RMML, MSPL and Hanumanth Rao. JSW Steel's Head-Corporate Strategy Prashant Jain, who was representing BCIC, said Sesa Goa was one of the companies in the cartel. The steelmakers said while the SC had allowed 30 million tonne iron ore production in the state annually, only 18 mt is being produced. Of this, around nine mt is being produced by state-owned NMDC. Of the rest, five-six mt is being produced by seven-eight private companies, which are part of the cartel. "We have approached the SC on Monday, seeking appointment of a price regulator," Nowal said.
The SC had allowed e-auction of iron ore in 2011 after partially lifting an iron ore mining ban in Karnataka. Since October 2011, MSTC has been conducting the auctions. In the beginning, the apex court-appointed monitoring committee was fixing the base prices depending upon the prices of NMDC. However, this practice was discontinued and private mining companies were allowed to fix the base price in April last year.
"Since April 2013, private mining companies have been setting floor price at the e-auctions of the ore much higher than the actual reasonable price. Floor price for 61 Fe grade ore, which should not be more than Rs 2,500 a tonne, has been set at Rs 5,000 a tonne," Karnataka Iron and Steel Manufacturers Association (KISMA) President Vinod Nowal, who is also the deputy managing director at JSW Steel, said at a press interaction here. The interaction was organised by Karnataka Iron and Steel Manufacturers Association (KISMA), Bangalore Chamber of Industry and Commerce (BCIC), Karnataka Sponge Iron Manufacturers Association (KSIMA) and Association of Indian Mini-Blast Furnaces.
"There are seven-eight mining companies which are included in the list of Category-B mines, as classified by the Supreme Court who have been doing this," Nowal said. The industry bodies showed a presentation highlighting names of six companies categories in the B category, including Sesa Goa, Chowgule & Company, Balaji Produce Company, RMML, MSPL and Hanumanth Rao. JSW Steel's Head-Corporate Strategy Prashant Jain, who was representing BCIC, said Sesa Goa was one of the companies in the cartel. The steelmakers said while the SC had allowed 30 million tonne iron ore production in the state annually, only 18 mt is being produced. Of this, around nine mt is being produced by state-owned NMDC. Of the rest, five-six mt is being produced by seven-eight private companies, which are part of the cartel. "We have approached the SC on Monday, seeking appointment of a price regulator," Nowal said.
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The base price of NMDC fines, having 62 per cent iron content, from April 2013 till date has remained relatively flat moved around Rs 2,400 per tonne. The base price by private mining companies, however, increased from Rs 2,500 per tonne in April to Rs 5,000 per tonne now. "And this is without any major increase in the input cost and a decline in the global iron ore prices during the period," said Suketu Shah, joint managing director at Mukand Ltd.
The SC had allowed e-auction of iron ore in 2011 after partially lifting an iron ore mining ban in Karnataka. Since October 2011, MSTC has been conducting the auctions. In the beginning, the apex court-appointed monitoring committee was fixing the base prices depending upon the prices of NMDC. However, this practice was discontinued and private mining companies were allowed to fix the base price in April last year.