The Associated Chambers of Commerce and Industry of
India (ASSOCHAM) has urged the Indian government to review the e-auctioning of
iron ore and provide long-term
iron ore linkages to protect the interest of the domestic iron and steel industry.
ASSOCHAM pointed out that the e-auctioning of
iron ore, instead of providing any relief to
India's iron and steel industry, will adversely affect it, the more so as lack of raw material has been a major cause for delayed progress of both green-field and brown-field steel capacity expansion projects. The industry body noted that, if e-auctioning is allowed for an important raw material like
iron ore, it will create complete chaos for the iron and steel industry and such a huge quantity of
iron ore for non-captive users cannot be fulfilled through the e-auction process.
According to ASSOCHAM, traders will be the sole beneficiary of the e-auctioning of
iron ore and they will charge higher prices to derive maximum benefits, thereby taking significant advantage of the demand-supply gap, especially as there are no captive mines to support the operation of the iron and steel industry.
Iron ore production in the financial year 2012-13 was 136 million mt, out of which 42 million mt was captive production, while 18.4 million mt of
iron ore was exported and about 76 million mt of the total
iron ore output was available for the non-captive steel producers.