ASSOCHAM: E-auctioning of iron ore needs reviewing

Tuesday, 04 February 2014 16:22:37 (GMT+3)   |   Istanbul
       

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.

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