 "A bird flies by the Vedanta office building in Mumbai")
With increasing iron ore stock in Karnataka, Vedanta has filed a writ petition in the high court, seeking permission to export.
The Supreme Court had banned mining of ore in Karnataka in July 2011, following allegations of illegalities, resulting in large-scale environmental damage. In April 2013, while the apex court allowed resumption of mining, it enforced an annual cap of 30 million tonnes (mt). The exports were also banned.
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The Karnataka High Court will have its first hearing on the matter on Tuesday.
According to Vedanta, there was an oversupply of iron ore in Karnataka. Apart from 30-mt production, there was an additional supply of 6 mt from mines with extended lease period and stocks.
In its 2013 order, the SC had directed that iron ore be sold only through e-auction conducted by the court-appointed monitoring committee. The situation was such that in the first quarter of 2016-17, more than 34 per cent of iron ore (3.42 mt) put up for auction remained unsold.
In the past few months, Vedanta has been unable to auction its iron ore (both lumps and fines of different grades), though the base sale price fixed by the company was around the average price realised by the monitoring committee during an earlier stock sale.
Vedanta urged the state government and the monitoring committee for permission to export the iron ore. While the state government did not pay any heed to Vedanta’s request, the committee said the decision could only be taken after the Supreme Court’s permission.
“Due to this delay, the petitioner (Vedanta) is time and again constrained to put up the very same quantity of iron ore for e-auction repeatedly by reducing its base sale price and only when the base sale price is reduced that the same is purchased by the end user industries at the very base price without any increase in bid amount,” the company said in its petition.
According to Vedanta, this was resulting in unfair market condition for sellers as a ‘buyers’ market’ was created since the buyer or purchaser had the option of “buying the iron ore in the e-auction or from any other lessee from any other state or even importing the iron ore into the country”.
“The entire finances of the petitioner company gets affected due to the delay in the sale of the iron ore and further, the logistics involving the mining operations also gets adversely affected due to piling up of the stock within the mining lease area,” said the company.
