Economy

Karnataka steel companies want NMDC to slash iron ore prices

Suresh P Iyengar Mumbai | Updated on June 14, 2018 Published on June 14, 2018

The Karnataka Iron and Steel Manufacturers Association has written a letter addressed to Piyush Goyal, Finance Minister, Narendra Singh Tomar, Minister for Mines, and Chaudhary Birender Singh, Minister for Steel, on the prevailing high iron ore prices in State which were pushing up the cost of steel production, particularly when the demand is reviving.

Requesting the government not to allow NMDC, the largest miner in the State, fix the base price of iron ore artificially high in the e-auction, the association said steel companies are not able to pass on the incremental cost as other companies in neighbouring States are offering steel at a lower price due to cheap raw material availability.

RK Goyal, Managing Director, Kalyani Steel and Vice-President of Karnataka Iron and Steel Manufacturers Association, told BusinessLine that the iron ore prices in Odisha should be the base price for e-auction in the State as it is a free market and there are no restrictions on output like in Karnataka. “While steel companies in the State are losing about ₹1,200-1,500 a tonne depending on the iron ore grade they use, miners cannot be allowed to jack up prices with a profiteering motive,” he said.

The Government should instruct the state-owned NMDC to reduce the prices rather than cutting down its production in the pretext that there is no demand for iron ore in the State, the association said in the letter.

Seshagiri Rao, Joint Managing Director, JSW Steel, said of the overall iron production capacity of 30 million tonne per annum in Karnataka, NMDC alone produces about 12 mtpa while private miners have capacity of 17 mtpa and Mysore Minerals produces about 1 mtpa.

NMDC had increased lump ore price by ₹150 to ₹3,050 a tonne and price of fines by ₹100 to ₹2,660 a tonne in May.

“If NMDC and other miners are claiming that there is no demand for iron ore in the State then what is the reason for an increase in prices,” Rao asked.

Published on June 14, 2018
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