The state-owned Mineral Exploration Corporation Limited (MECL) has estimated iron ore reserves at 220 million tonnes in 15 C-category mines in Karnataka. The MECL has conducted studies to assess the mineral reserves in these mines after the Karnataka government entrusted it with the task before auctioning these mines.
"State government has taken steps to re-allocate the cancelled 'C' category mines through auction. MECL has prepared exploration reports of 14 'C' category mines out of 15, which will be auctioned in the first phase. We are currently awaiting the approval from the Supreme Court to conduct auctions," Shankaranarayana, Director of Mines and Geology, government of Karnataka said.
The MECL has estimated that these 15 mines contain about 220 million tonnes and at the rate of 11 million tonnes per annum the reserves will last for about 20 years, he said at a panel discussion organised by Assocham, here today.
Once the auction for first set of 15 mines is conducted, the Directorate of Mines and Geology will auction another 15 mines in the second phase. "It is estimated that another 200 million tonnes of iron ore reserves are available that could be auctioned in the second phase. The MECL will be asked to study the exact reserves available in these mines," Shankaranarayana said.
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However, the steel industry differs with the estimates of MECL. According to Vinod Nowal, deputy managing director, JSW Steel, only five out of 15 mines in C category are useful and contain good reserves, while the remaining contain very less quantity of iron ore.
Meanwhile, the state government has submitted a draft scheme of auction to the Supreme Court and is awaiting the approval to proceed with the auction process. "We are awaiting the approval from the supreme court to conduct auction for the first 15 mines in 'C' category. State has received exploration reports from MECL," state chief minister Siddaramaiah said.
The Supreme Court has fixed 30 million tons as the Iron ore annual production limit in Karnataka. The State has made its effort to achieve 21.23 million tonnes of iron ore production in the year 2014-15 from 26 mines including two mines each of NMDC Limited and Karnataka government-owned Mysore Minerals Limited. In 2015-16, Karnataka is determined to achieve about 26 to 27 million tonnes of iron ore production.
Nowal said the additional capacity is likely to be added if the Supreme Court approves some of the existing mines to increase their production. Currently, the Apex Court approval is awaited for them to enhance their production as many other mines have not shown interest in resuming operations due to lower capacities.
The steel and allied industries dependent on iron ore from Karnataka require an estimated 35 million tonnes of iron ore annually, while the availability is around 21 million tonnes. In 2014-15 steel industry imported around 6 million tonnes of iron ore. In the current year too, companies like JSW Steel are considering an option to import 3-4 million tonnes to tide over the shortage, Nowal added.
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