The iron ore crisis for domestic steel mills in India became important issue as many of the steel plants has to cut down their production. The plants are running on almost 50% to 75% of their capacity due to the shortage in the supply. The State of Karnataka in India, which is already, has banned the mining of iron ore has a major impact on the domestic and international supplies along with impact on the prices of iron ore. But iron ore stock piles near mines are being released through e-Auctions to maintain the supply for the domestic steel mills.
The State Government of Karnataka, India has allowed the release of higher quantity of iron ore through e-Auction. The monitoring committee appointed by Supreme Court has decided to put 4 million tons of iron ore for October 2011. Stock piles of almost 25 million tons are lying around various mines in Karnataka. This decision came after the steel mills in the state has requested the Chief Minister of the state to increase quantity to 2.5 million tons per month through electronic auction.
The release of higher quantity of iron ore through electronic auction has came as relief to major sponge iron manufacturers, pig iron manufactures and steel mills which are dependent of iron ore supplies from Karnataka.
The earlier electronic auction of iron ore in Karnataka State of quantity 1.24 million tons has fetched 20% above the base price to the Government.