Comments
Steel units in Karnataka on Monday moved the Supreme Court against alleged iron ore price distortion in e-auctions and accused private miners in the State of “cartelisation”.
According to industry sources, steel and sponge iron units of Karnataka, including JSW Steel Ltd, filed an affidavit in the apex court, demanding regulation of base pricing in the e-auction. The court will hear the case on February 17.
The steelmakers alleged that except the State-owned NMDC Ltd, all other miners have formed a “cartel” and have been jacking up the base prices of iron ore at the e-auctions. They also sought the appointment of a retired Supreme Court/ High Court judge as the regulator for base price fixation till the iron ore short-supply ends. Three industry bodies – the Karnataka Iron and Steel Manufacturers’ Association, the Karnataka Sponge Iron Manufacturers’ Association and the Association of Indian Mini-Blast Furnaces – along with the Bangalore Chamber of Industry and Commerce have also decided to file an application at the Competition Commission of India on the issue.
In a statement, the four organisations said that in the past four months, owing to “this cartelisation, iron ore fines prices have doubled”.
The base price of NMDC fines, having 61 per cent iron content, from April till date has moved from ₹2,000 to ₹2,220 a tonne. The base prices by private mining companies were, however, in the range of ₹2,250 to ₹2,475 a tonne until September 2013.
The units complained that it has now been pushed to ₹5,000 per tonne for similar grade of ore. Seshagiri Rao, Joint Managing Director, JSW Steel, told Business Line the base price of ₹5,000 per tonne of iron ore was unheard of in Karnataka even when the international prices touched $200 (₹12,600) a tonne in 2008.
“The high base price by private companies is sort of cartelisation as state-owned companies have resisted hiking prices due to a fall in the international markets,” he said. The high base price for 61 per cent Fe grade iron ore will now cost ₹7,000 a tonne if the royalty, transportation and local taxes are included, he added
The Supreme Court had allowed e-auction of iron ore in 2011 after partially lifting an iron ore mining ban in Karnataka. Since October 2011 MSTC Ltd has been conducting the auctions. In the beginning, the Apex court-appointed monitoring committee was fixing the base prices depending upon the prices of NMDC.
However, this practice was discontinued and private mining companies were allowed fix the base price.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.