The report of the Central Empowered Committee (CEC) on Karnataka?s mining sector, expected to be submitted to the Supreme Court this week, has the state steel industry on the tenterhooks.

Steel companies in the state, including Kirloskar Ferrous Industries and BMM Ispat, are a worried

lot over the prospect of the apex court deciding to continue the ban on iron ore mining in the state imposed in October last year.

Sources said the court will take up the CEC report on Friday. The SC had appointed the committee to look into allegations of illegal mining in the state.

?We are not very optimistic. I do not see an immediate lifting of the ban on mining. We are buying iron ore through e-auctioning of whatever quality is available, which is affecting everyone’s (other steel companies) product competitiveness,? said Kirloskar Ferrous Industries MD RV Gumaste.

The company produces around 5 lakh tonne of products, including pig iron and castings. It has already announced its plans to install a new high-pressure moulding line at the existing plant in Karnataka, to enhance the production capacity of castings by 72,000 metric tonne per annum, with an estimated investment of around R200 crore.

However, with the continuing mining mess, Gumaste said it was difficult to focus on expansion at the moment. ?Though, with the e-auctioning, the supply of iron ore has improved, there is no assurance on the quality of the

raw material. With the current supply, our blast furnaces can run for the next few months, but after that, the mining has to be opened up,? he said.

The company’s net profit fell from R13.45 crore in the April-June quarter to R7.33 crore in the July-September quarter.

Similarly for Karnataka-based BMM Ispat, its expansion plans have almost been put on the back burner due to unavailability of the raw material.

?Our stocks are depleting. We can not transport it (iron ore) from other states due to high logistic cost. If the ban continues, we’ll have to shut down our plant,? said BMM Ispat MD Dinesh Kumar Singh.

The company, at present, produces 75,000 TMT bars annually. It has plans to set up a two mtpa integrated plant in future.

JSW Steel said it will not comment as the matter is sub-judice. The company’s margins have been hit severely.

Its third quarter (October-December) profits dipped 56% year-on-year at R168.2 crore from R382.3 crore a year before.

Karnataka is the country’s second largest iron ore producing state.

The Karnataka government has received a

proposal to set up 57 million tonne per annum (mtpa)

of fresh steel production capacity with an investment of $55 billion from including the investors like Arcelor Mittal, Posco and Severstal.