Miners seek Apex Court approval to export iron ore

With steel mills not keen on buying low-grade iron ore fines in Karnataka, the mining industry has sought urgent intervention of the Supreme Court (SC) for permission to export the key steel-making raw material.

During the fiscal ended March 2019, close to 5 million tonnes of iron ore was unsold at the e-auctions in Karnataka. This prompted the miners to approach the Apex court for permission to export. Currently, the export of iron ore from Karnataka is not allowed as per the Apex Court order dated April 13, 2013.

Also, the prevailing prices of iron ore in the international market makes it attractive for miners to look at the export market. Currently, 54 fe iron ore is priced at $60 per tonne in the international market, while the high-grade iron ore with 62 fe is priced at $92 per tonne.

Two of the private sector mining companies such as Vedanta and Mineral Enterprises Limited (MEL) that operates iron ore mines in Chitradurga district are seeking approval to export iron ore. Both have filed separate petitions. MEL filed its application in the SC on Wednesday, whereas Vedanta’s application was made much earlier.

“We want to export iron ore fines produced in our mines in Chitradurga which are of low-grade (54 fe) and there is no demand for such ore in the country. Even when we offered at a low base price of Rs 450 per tonne in e-auction, which is far lower than the imported material, the steel mills have not bid for them for many months. Export of such material will also help us in recovering costs and earn valuable foreign exchange for the country as well,” Basant Poddar, Managing Director, MEL told DH.

In addition, steel mills prefer to buy iron ore from mines in Ballari district due to logistic reasons and they consider Chitradurga to be far away, that contains low-grade ore.

Over the last 10 months, a huge quantity of 3,68,000 tonnes of iron ore produced by MEL is lying unsold, on the lease premises, despite the said ore (in smaller lots, and as a whole) having been offered — in e-auction — on as many as seven separate occasions, at a base price of Rs 450, Poddar said.

“We are saddled with huge quantities of unsold ore, despite readily available export market for the same,” he said.

In view of the large difference in export price compared to domestic prices, permitting export of iron ore will also benefit the government exchequer, by generating larger revenues in the form of royalties, district mineral fund (DMF), and contribution to special purpose vehicle (SPV) among others, he added.

Allowing the export of iron ore will also benefit the Indian Railways, which is currently operating empty wagons between Mangaluru and hinterlands. While it carries the imported coal to the steel mills in Ballari region, its wagons go empty on return journey.