FIMI urges govt to ease trade limits on iron ore

New Delhi: THE Federation of Indian Mineral Industries (FIMI) on Monday urged the Centre and State governments to remove various restrictions imposed exclusively on iron ore trade in Karnataka. Karnataka is the only State in India where the miners have no commercial freedom to sell their product, where entire ore has to be sold through institutionalised e-auction to parties meeting eligibility criteria - domestic-end users, FIMI, Southern Region, said in a statement. It is also the only State from where export of iron ore and pellets made from Karnataka ore is prohibited, it stressed.

However, there is no corresponding requirement on the eligible purchasers to exclusively source from e-auction. Even though there is adequate supply of Karnataka ore which for the current financial year will be around 45 million tonnes (MT) against demand of around 36 MT, there has been consistent and substantial quantities imported from other States as well as abroad every year, tipping the balance and pushing the iron ore industry into duress. "Owing to...non-level playing field in terms of trade restriction where the miners can only sell the material domestically, without any alternate market for sale, the prices in Karnataka are subdued and the Karnataka iron ore is being sold at $50 as against $140 internationally," it said. Various rigorous conditions which are now strangling the iron ore industry were imposed by the Supreme Court in 2011, the FIMI claimed." The Court provided the rationale that such stringent measures were required to redress the extraordinary situation which existed then and to give time for the authorities to establish systems for monitoring," it said.

Central Empowered Committee, the commission of Supreme Court, itself has recommended to the apex court that these conditions have served the purpose and it is time to revisit the same, FIMI said.

"The restrictive trade practices in the State of Karnataka have detrimental effects on Karnataka iron ore industry and also resulting in low confidence among the investors particularly in iron ore sector.