Let e-auction of iron ore stabilize, govt tells steel cos
The central government today asked the steel industry to allow the e-auction process of iron ore in Karnataka to stabilize, even as the severe crunch of the ore has brought the producers in the state to the verge of closure.
"The auctioning process (of iron ore) has just started, we need to give it time to settle down. One cannot jump the gun... Please wait... We have to see whether this mechanism is working and how effective it is working," Steel Secretary P K Misra told reporters here.
He was replying to a question on JSW Steel's announcement that the company was on the verge of closing down its 10 million tonne Karnataka plant due to acute shortage of iron ore.
To a particular question on whether the industry should wait for stabilization of the new system, Misra said, "Yes".
The Supreme Court had banned mining in Karnataka for fear of large scale environmental degradation.
Since the mining is prohibited, there has been a severe shortage of iron ore, the raw material for steel making, in South India.
In its subsequent orders, the apex court had allowed release 25.88 million tonnes of iron ore stock lying at the mines in Karnataka through e-auctions on a monthly basis.
The auction of iron ore from the stocks lying at the Karnataka's mines started on September 14. The apex court had directed release 1.5 million tonnes of the raw material per month through electronic bidding.
The second round was held today, results of which have not been made public.
Misra further said that the JSW officials were told to present their grievances to the apex court, which alone can decide on how to make iron ore available in Karnataka.
"We met (JSW officials) them yesterday... We all are bound by the Supreme Court orders. We have to follow it and that is what we told them," Misra said.
He added that the government would take about a month's time to assess the situation of iron ore availability done through auction process for industries in Karnataka and other neighbouring states, before making any opinion.
"It will take us a month or so to assess the situation. Then we can decide what next should be done," the Steel Secretary said, adding that "prices have not risen, that shows that demand is met. So we have to see how it works".
While JSW Steel said on Tuesday that its Vijayanagar plant in Karnataka is running at 30 per cent capacity and is on the verge of closure, about 70 sponge iron units in the state have already closed down their operations for want of raw material.
