Higher price, poor quality result in 2.24 MT unsold iron ore inventory in Karnataka
Higher price and poor quality led to an unsold iron ore inventory of 2.24 million tonne (MT) in 2018-19 in Karnataka, according to industry body KISMA.
The development assumes significance as a group of mining dependents in Karnataka had earlier requested the Supreme Court-appointed panel to allow free iron ore trade and give preference to local ore over imports.
During 2018-19, Karnataka produced 28.49 MT of iron ore but sold only 26.25 million tonne. So, the unsold inventory is 2.24 MT, the Karnataka Iron and Steel Manufacturers Association (KISMA) said.
In 2017-18, the state had produced 27.7 MT of iron ore and sold 27.9 MT, including some inventory from the previous fiscal.
"During 2018-19, Karnataka produced 28.49 million tonne of iron ore but sold only 26.25 million tonne. Thus, the actual unsold inventory is only 2.24 million tonne, as opposed to various claims made by the miners pointing towards higher inventory. This inventory has remained unsold due to unreasonably higher price and poor quality of the material," KISMA Secretary Ramana Kumar said in a statement.
Private mining companies exploited this shortfall by producing more and started selling in the market by increasing the prices of iron ore in e-auction despite the fact that their iron ore being of inferior grade, Kumar said.
"If what these miners claim for unsold inventory is to be believed, then they are largely indicating unusable iron ore material pertaining to previous years. The real unsold iron ore inventory during 2018-19 was only 2.24 million tonne mainly due to high price and quality issues," he added.
After mining was banned in Karnataka in 2011, scores of people dependant on iron ore mining industry including truckers and small scale industries, were hit as it resulted in job loss and extreme cases of poverty, Karnataka Gani Avalambithara Vedike (KGAV), which represents mining dependents, had earlier said in a statement.
The Supreme Court later allowed mining with production limits and other restrictions. It also appointed a central empowered committee (CEC) to look into issues related to iron ore mining in Karnataka.