The Karnataka government’s recent decision to restrict issue of mineral dispatch permits to mining companies has affected the supply of iron ore to steel mills in the southern and western parts of India.
The supply of iron ore to sponge iron (DRI) makers has dropped by up to 50%, according to estimates.
There is no possibility of any withdrawal of the restriction for the time being, the state government said.
Mining companies fear the supply situation will only get worse and will impact the price of steel products. Sponge iron makers, particularly in Tamil Nadu, Gujarat and Maharashtra states, are most affected with the restriction of inter-state movement or iron ore from Karnataka mines.