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Jul 12, 2012, 08.23 AM IST
The Central Empowered Committee or CEC has given its nod for 8 mines, reports CNBC-TV18's Nigel D'souza.
It is almost a year since this mining ban was imposed on Karnataka. Earlier this year in April, the Supreme Court (SC) direct the CEC to get this companies to give their reclamation and rehabilitation (R&R) plan.
The next step would include two more approvals. The two approvals would be from India Bureau of Mines (IBM) as well as consent for operation from the State Pollution Board. Post getting these approvals, iron ore would start floating to these particular companies. The street, as well the companies, stated that it will take around a month for these approvals to come through.
To break up these eight mines, around 5-6 of these mines are reportedly in the category A. We could see iron ore flowing from here and the estimates suggest that 5.5 million tonne of iron ore would flow from these particular mines. But even 5 million tonne would be a big relief because the only source of iron ore at present is from NMDC in Karnataka.
There were 25 million tonne of iron ore in their inventories. However, nearly 22-22.5 million tonnes have already been liquidated and the remaining 2-3 million tonne are not of higher quality of iron ore that could be used by these particular firms. So, all these companies in Karnataka have been relying entirely on NMDC.
Now, NMDC has been given a go ahead for one million tonne, but as per latest reports, it is producing only 0.6 million tonne per month and as per last auction, that is from June 20 to June 30, lumps were being sold at Rs 7,000 per tonne. This is at a premium of nearly 30-40% from the pre-mining band.
Stock-wise, JSW Steel is expected to gain in a big way. Remember, JSW Steel has been sourcing their iron ore from North India. That is around Rs 3,000 per tonne of steel that they produce was the extra cost. So, any ore flowing in from these particular regions would be a big boost to them and JSW would be saving on these high freight cost.
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Jun 19 2013, 23:15
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