India’s Ministry of Steel is considering a mechanism to impose penalties on idling of capacities and forcible liquidation of stocks of private iron ore miners to ramp up supplies and soften domestic prices, a government official said on Monday, June 26.
He said that the ministry has set up a committee which would frame such a mechanism aiming to ensure competitive and assured supplies of raw material to domestic steel mills.
The move comes soon after the ministry’s earlier proposal to fix a price band for domestic price of iron ore did not find favor within the government, particularly the mining sector, he said.
Though details of the contours are not yet clear, the official said that the committee appointed would submit its report within the next one month.
The ministry guidelines are that the mechanism should set certain capacity utilization benchmarks for private miners and any idling of capacity below such benchmarks would make miners liable to face a penalty.
While this would ensure steady supplies, it has also been proposed that private miners would be set specific volumes of unsold stocks and any iron ore stock above such limits, the government would be empowered to force the miners to liquidate such stocks within specific time limits, the official added.