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Supreme Court permits e-auction of iron ore inventory in Karnataka
The Supreme Court (SC) has permitted e-auction of 1.5mn tonnes (per month) of raw iron
ore from the inventory lying in Karnataka mines. As per estimates, there are 25mn tonnes
of iron ore inventory in Karnataka. However, it has stated that this iron ore should be used
exclusively to meet the requirements of the domestic steel industry in the region and no ore
should be exported. The NMDC pricing structure will be used as a reserve price after
adjusting for the grade. The SC had banned iron ore mining in Karnataka's Bellary,
Tumkur and Chitradurga districts following the recommendation of the Central
Empowered Committee, which had detected illegal iron ore mining in these districts.
A substantial portion of this inventory should be available to JSW Steel in our view as
approximately 14mn tonnes of the piled-up inventory is of low-grade iron ore. Barring JSW
Steel, there are no players that can utilise the low-grade iron ore in the Karnataka region.
We maintain our Neutral rating on the stock.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Supreme Court permits e-auction of iron ore inventory in Karnataka
The Supreme Court (SC) has permitted e-auction of 1.5mn tonnes (per month) of raw iron
ore from the inventory lying in Karnataka mines. As per estimates, there are 25mn tonnes
of iron ore inventory in Karnataka. However, it has stated that this iron ore should be used
exclusively to meet the requirements of the domestic steel industry in the region and no ore
should be exported. The NMDC pricing structure will be used as a reserve price after
adjusting for the grade. The SC had banned iron ore mining in Karnataka's Bellary,
Tumkur and Chitradurga districts following the recommendation of the Central
Empowered Committee, which had detected illegal iron ore mining in these districts.
A substantial portion of this inventory should be available to JSW Steel in our view as
approximately 14mn tonnes of the piled-up inventory is of low-grade iron ore. Barring JSW
Steel, there are no players that can utilise the low-grade iron ore in the Karnataka region.
We maintain our Neutral rating on the stock.
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