Indian steel major JSW Steel Monday said that it had to scale down its production to 30 percent from Saturday owing to an abrupt shortage of iron ore.
"JSW Steel has been compelled to to scale down production to 30 percent from Saturday after the honourable apex court's order directing to sell iron ore produced by NMDC (National Mining Development Corporation) through e-auction by the monitoring committee irrespective of long term contracts," the company said in a statement in Mumbai on Monday.
The company's move followed the Supreme Court's letter in July in directing all mining in Karnataka's Bellary to be stopped on allegations of rampant illegal mining in the region.
However, in August, keeping in view the severe iron ore crunch being faced by the industry, the apex court ordered state-owned miner NMDC to release 1 million tonne per month of iron ore and thereafter ordered a further release of release of 1.5 million tonne per month of ore by e-auction through a monitoring committee.
"This measure has not given any relief as 31 percent of the total auctioned material was not bought by any of the participants in the e-auction due to improper pricing for low grade ore," the company said.
"Further, out of the balance 69 percent of the auctioned material, only 10 percent was dispatched to the industry till date due to several procedural delays," it added.
According to the company, artificial scarcity of material may result in the prices of the raw material increasing to unnatural levels.
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