There is some good news on the way for ore-starved steel mills in Karnataka. The Supreme Court-appointed monitoring committee, which is supervising the e-auction of iron ore, has planned to put on auction iron ore dumps, containing mostly low-grade iron ore.
The committee has started assessing the approximate quantity of iron ore available in the dumps at several places in the three mineral-rich districts of Bellary, Chitradurga and Tumkur. The process would be completed in a month’s time and then go to the Central Empowered Committee (CEC) for approval to put on e-auction, official sources said.
“The monitoring committee is currently assessing the quantity of iron ore available at the dumps in about 8-10 mines in the state. There is an estimated four million tonnes (mt) of iron ore available in these mines and it would be made available for steel mills in the next one or two months,” a person aware of the development told Business Standard. Though there is no proper information on what could be the exact quantity of iron ore available at the dumps in Karnataka, industry sources estimate it to be in the range of about 100 mt over the last few decades.
According to miners, the monitoring committee is conducting assessment of the iron ore at dumps in various mines, where the mine owners had not declared their dumps earlier when they were carrying out mining. The mining rules stipulate the miners to give a declaration while conducting mining as to what type of ore they had dumped.
However, not many mine owners had declared their dumps except Mineral Enterprises Ltd (MEL), which had preserved its dumps.
Once the assessment is completed, the monitoring committee will carry out the grading of the iron ore as most dumps contain low-grade iron ore. Subsequently, the steel mills will be given 8-10 days to visit these dumps and make their own assessment before they participate in the e-auctions. “The idea is to sell the entire lot of iron ore to only one steel company because of the nature of the iron ore,” a source said.
JSW Steel would be the biggest beneficiary of the dumps as it has created large capacity to beneficiate low-grade iron ore and use it in its steel mill. It had purchased a significant portion of the dumps auctioned earlier last month.
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Last month, the monitoring committee had put on auction about 6.7 mt of dumps from MEL and another 800,000 tonnes from Kartikeya Mines at a floor price of Rs 850 per tonne.
Meanwhile, the committee is likely to retain with itself the value of the ore after it is auctioned and will not pass it on to the respective mine owners. The collected money will be pooled into a special purpose vehicle, which will take up the rejuvenation of mining areas in the three districts.
The steel manufacturers in and around Karnataka such as JSW Steel, Kalyani Steel, BMM Ispat and pellet makers like MSPL are currently facing huge shortage of iron ore for their mills. The industry requires about 30-35 mt of iron ore per annum for their current installed capacities.