The Supreme Court has asked the Central Empowered Committee to respond to a plea made by the Federation of Indian Mineral Industries (Southern chapter) for permission to export pellets produced in Karnataka's Ballari, Chitradurga and Tumakuru districts.
A bench of Justices Ranjan Gogoi, Abhay Manohar Sapre and Navin Sinha issued notice to the CEC seeking its reply within six weeks on the application, which, among others, contended the ban on export of pellets manufactured from iron ore purchased in Karnataka is leading to an aberrant situation where pellet manufacturers are forced to source iron ore from outside the state.
The pellet is a unique product made out of iron ore fines and is completely different from iron ore.
In its application, the FIMI, represented by senior advocates Krishnan Venugopal, Aditya Narayan and Rohit Sharma, contended that the export of pellets is warranted in order to place present and future pellet plant manufacturing units in Karnataka on a level playing field.
“Value-added products produced from iron ore mined in Karnataka do not face any export restriction. Accordingly, there is absolutely no reason why pellets alone should be subject to discriminatory export restriction as compared to intermediate products such as sponge iron, direct reduced iron, etc,” the application stated.
“Despite facing a grim economic situation where pelletisation plants are unable to sell pellets in the domestic market, they are now being prevented from exporting pellets even though the Supreme Court did not impose a ban on the export of pellets,” it added.
Stocks of unsold pellets
The MSPL Limited, a member of the lobby, which owned and operated a pelletisation plant, has huge stocks of unsold pellets even when the pellet plant is being operated at around 50 percent of its installed capacity.
Since 2014, when the court dismissed a similar plea in view of the CEC's concerns, all these industrialists are hesitant to make a large investment into iron ore leases and pellet manufacturing infrastructure in view of the extant ban, it said.
“A paradoxical situation has, consequently, emerged that a public sector undertaking is transporting ore over thousands of kilometers by rail, road, sea, from different parts of India and world, while ore is available in Karnataka for consumption but cannot be consumed due to the ban on export of pellets produced from the ore sourced in Karnataka,” it said.