KISMA and Association of Indian Mini Blast Furnace will appeal in the Supreme Court for exceeding Iron ore production limit from 30 MnT to 40 MnT on 24 Feb, 2014.
Karnataka Iron and Steel Manufacturers’ Association (KISMA) and Association of Indian Mini Blast Furnace have alleged the state miners for applying monopolistic pricing strategies in Iron ore supply.
Karnataka Steel manufacturers are facing shortage of Iron ore since past few months on account of low production and high prices. In addition, the miners are supplying raw material on high prices of over 70-80 percent than the base price. Iron ore with Fe content of 63 percent costs about INR 2,150/MT in Odisha while in Karnataka prices of same grades are at around INR 3,800-4,150/MT. Moreover, the miners have permission from the Supreme Court (SC) to decide the base price, quantity and quality of the raw material.
The state’s Steel manufacturers require a total of 40 MnT Iron ore. While, SC has granted permission of only 30 MnT productions post ban lifting, imposed earlier on Sept 2011 in Karnataka. Although, the Apex Court had allowed 115 mines to resume production, only about 21 mines in Karnataka are operating. The overall annual production of the state is just about 18-19 MnT, not even reaching the 30 MnT annual capacity of raw material production limit. KISMA has also approached Congress leader Sonia Gandhi to seek help for sufficient supply of the Iron ore in the state. The association mentioned of around 28 out of 53 Sponge Iron plants in Karnataka which have shut down owing to shortage. Others are operating only at about 27 percent capacity utilization. Furthermore, the state’s integrated Steel plants are running at a very low capacity of around 60-70 percent only.
According to KISMA, it might take more than 2-3 years for mines to operate at an acceptable capacity, which might lead to more closures of Iron and Steel mills from the state.
Both the associations, KISMA and Association of Indian Mini Blast Furnace will submit their time-bound action plan to the Apex Court by 24 Feb, 2014 as decided by the court. They will appeal for increasing the production limit of the raw material in the state so as to increase Steel productions.