'Iron ore producers forming cartel'

The steel units from Karnataka, on Tuesday, alleged that private iron ore producers have formed a cartel in the State and are selling raw material at price as high as Rs 5,000 per tonne.

President of the Karnataka Iron and Steel Manufacturers’ Association (KISMA) Vinod Nowal told reporters here that the base price of iron ore, sold through e-auction only in Karnataka following a Supreme Court order, has risen to an “unprecedented and exceptional” level.
 “Some private iron ore miners have formed a cartel and have uniformly increased base price without any direct link to increase in production cost,” Nowal said. Seeking relief, the association has filed an application before the Supreme Court.

Rise in prices

Though 21 iron ore mines are functioning in Karnataka, seven major miners have jacked up the price for freshly excavated ore, which is hurting the steel manufacturers. 

Though the cost of excavating ore is just Rs 300 per tonne, the mining companies are charging Rs 5,000 per tonne, Nowal charged.

Despite the Supreme Court capping of 30 million tonne excavation of iron ore per year, against the requirement of 40 million tonne for the existing steel making firms, so far, only 18 million tonne is being produced. 

Taking advantage of the shortfall in the availability of ore, mining owners have increased prices.