Problem is, however, that NMDC hasnt been able to produce more than 0.5-0.6mn tonnes a month. Thanks to this, as well as very small amounts being auctioned, the auction price shot up and industry bought very little oreuntil a couple of days ago, industry got just about 30,000 tonnes of ore as against the 1.2mn tonnes it was expecting to get.
It is not possible to endorse the steel industrys point that auctions be banned and iron ore be sold on the basis of the existing long-run contractsin a shortage situation, as weve learnt from the A Raja case, allowing benefits to be cornered by a few is unacceptable. But there is a case for allowing more mining. The Supreme Courts monitoring committee, for instance, had identified 13 mines other than NMDCs where no irregularities were detectedthese can produce 8-9mn tonnes a year; there are another 18 abandoned/non-working mines that the committee said were clean and according to industry they may yield another 4-5mn tonnes. Both the Karnataka government as well as the Centre need to prevail on the Court to free up mining wherever possible at the earliest. A larger issue, weve pointed out earlier (http://www.financialexpress.com/news/FE-Editorial-From-no-go-to-go/849795/) using the example of Australia, is that allowing professional mining firms can dramatically raise the discovery of ore as well.