Sesa, JSW accuse each other of manupulating iron ore prices
Feb 09 2014 , New Delhi
Leading private iron ore producer Sesa Sterlite alleged that JSW Steel, the largest steel producer in Karnataka, is manipulating prices of iron ore by misusing its dominance in the local market.
Terming the allegation as false and baseless, JSW Steel said that Karnataka mining firms are promoting "greed" by unfairly fixing higher iron ore prices and propagating misleading and baseless information to divert attention.
"By virtue of having monopoly, they (JSW) are trying to affect and manipulate the base pricing scenario. They are trying to force their own price on the sellers," Sesa Sterlite's Executive Director (Iron Ore Business) P K Mukherjee told PTI.
JSW Steel alone has bought 63% of the total 12 million tonnes (MT) of iron ore sold in Karnataka since April, 2013 (when the mining ban was lifted by the Supreme Court in the state) and "having monopoly in the market, they are trying to get the maximum advantage of this situation, he alleged.
Other two major buyers Kalyani Steel and BMM Ispat account for next 12% of total sales, he said.
"First, they (JSW, Kalyani and BMM) allow smaller companies to buy in the auction. Once appetite of the smaller firms is over, Raja baitha hai khane ke liye (the bid daddy is here to manipulate)," he alleged.
When asked about the allegations, JSW Deputy Managing Director Vinod Nowal said, "What is claimed is false, untrue and baseless. If price can be manipulated by few steel companies, as falsely alleged, the iron ore should have been sold at base price. But it did not happen."
Nowal said that the base price itself is unfairly fixed which is double of what NMDC is offering. "This unjust act is done only with an intention to promote their greed by taking advantage of distress the steel industry is undergoing due to severe shortage of iron ore."
Since the fixation of base price at Rs 5,000 per tonne is the final nail in the coffin, the steel companies has no option but to make all the stake holders aware of these misdeeds of certain private mining companies, he said.
The charges levelled by the two companies have come against the backdrop of Sesa Sterlite fixing the base price of its iron ore fines, having 61% Fe, at Rs 5,000 per tonne in the last e-auctions, held on January 31.
This action led to steel producers in Karnataka alleging cartelisation last week by the mining firms. The miners had retorted by making counter allegation of cartelisation by steel firms.