The ban on mining in the three regions of Karnataka, following a recent Supreme Court order, had led to an artificial shortage of iron ore and this may lead to another round of hikes in steel prices.
"Mining is a traumatic issue for the steel industry and an artificial shortage of iron ore has been created following the supreme court order banning mining in the three regions of Karnataka," Rajesh V Shah, Co-chairman and MD, Mukand Ltd told reporters on the sidelines of the India-Japan global partnership summit.
Iron ore is a key raw material for the steel industry and Shah said the Supreme Court order will affect steel companies especially those in the small and medium sector. "The mining ban has affected us as well and may lead to another hike in steel prices," he added.
The steel industry is going through a rough patch, with the Supreme Court banning iron ore mining in Bellary, Chitradurga, and Tumkur regions in Karnataka due to large scale environmental degradation of the areas.