<p> Manufacturers of sponge iron are looking down the barrel due to the government’s decision to lease out ‘C’ category mining areas through e-auction. Eleven mining areas under the category in Ballari and Chitradurga districts are to be auctioned. <br /><br /></p>.<p>As many as 67 sponge iron units in the districts of Ballari, Koppal, Raichur and in neighbouring Andhra Pradesh are already reeling under a shortage of ore, their principal raw material. <br /><br />Owners of these units fear that the e-auction process may further create a crunch, pushing them to the brink. <br /><br />Of the 67 units, only 22 are functioning. <br />As per the new auction rules, the company which has won the contract has to use all the ore produced.<br /><br />Also, the companies have to take part in the e-auction process as single entities. <br />Rates of mining areas available for auction have also gone up, making it difficult for owners of sponge iron units to take part in the auction process. <br /><br />The new rules favour owners of big industries, says the Karnataka Sponge Ore Manufacturers Association.<br /><br />T Srinivasa Rao, president of the Association, said that the sponge iron units require just between 50,000 tonnes and 80,000 tonnes. <br /><br />The sponge iron producers can neither purchase ore in the range of millions of tonnes available through e-auction nor utilise the quantity purchased. <br /><br />They cannot even sell the ore purchased through e-auction. <br />Rao told Deccan Herald that 30,000 tipper lorries were rusting without work in Ballari and Hosapete. This has pushed 20,000 workers and two lakh dependents to the streets. <br /><br />He cited the report by former Lokayukta Justice Santosh Hegde, in which he has sought rules for providing ore to local industries.<br /><br />He said that the fee to purchase applications for the tender process was Rs five lakh and that it was too high for small industrialists. <br /><br /><br /></p>
<p> Manufacturers of sponge iron are looking down the barrel due to the government’s decision to lease out ‘C’ category mining areas through e-auction. Eleven mining areas under the category in Ballari and Chitradurga districts are to be auctioned. <br /><br /></p>.<p>As many as 67 sponge iron units in the districts of Ballari, Koppal, Raichur and in neighbouring Andhra Pradesh are already reeling under a shortage of ore, their principal raw material. <br /><br />Owners of these units fear that the e-auction process may further create a crunch, pushing them to the brink. <br /><br />Of the 67 units, only 22 are functioning. <br />As per the new auction rules, the company which has won the contract has to use all the ore produced.<br /><br />Also, the companies have to take part in the e-auction process as single entities. <br />Rates of mining areas available for auction have also gone up, making it difficult for owners of sponge iron units to take part in the auction process. <br /><br />The new rules favour owners of big industries, says the Karnataka Sponge Ore Manufacturers Association.<br /><br />T Srinivasa Rao, president of the Association, said that the sponge iron units require just between 50,000 tonnes and 80,000 tonnes. <br /><br />The sponge iron producers can neither purchase ore in the range of millions of tonnes available through e-auction nor utilise the quantity purchased. <br /><br />They cannot even sell the ore purchased through e-auction. <br />Rao told Deccan Herald that 30,000 tipper lorries were rusting without work in Ballari and Hosapete. This has pushed 20,000 workers and two lakh dependents to the streets. <br /><br />He cited the report by former Lokayukta Justice Santosh Hegde, in which he has sought rules for providing ore to local industries.<br /><br />He said that the fee to purchase applications for the tender process was Rs five lakh and that it was too high for small industrialists. <br /><br /><br /></p>