Iron and steel companies in south India have approached the Supreme Court again, seeking permission for “clean” iron ore mining companies to restart operations in Karnataka.
“The stockpile of 25 million tonnes put up for sale through e-auction would last till April 2012. To ensure continuous supply of to steel mills, it’s essential to restart the mining by at least clean mining companies. So, we have made a request to the apex court through the Karnataka Iron and Steel Manufacturers Association (Kisma) to give permission for clean mining companies,” Vinod Nowal, director and chief executive of JSW Steel, said.
The Supreme Court, in its order on July 29, had ordered suspension of all mining activities in Bellary district. On August 26, the court banned mining in Chitradurga and Tumkur districts. So, 16 steel mills, including JSW Steel, Kalyani Steels Ltd, Mukand Steels Ltd, Kirloskar Ferrous, VISL Bhadravathi, MSPL Ltd, BMM Ispat Ltd and Sathavahana Ispat, are facing shortage of iron ore.
Nowal said Kisma would make another appeal on January 20, when the apex court restarts hearing the case. “There is a need for an urgent action in this regard, as the Karnataka government is yet to submit mine-wise R&R (resettlement & rehabilitation) plan to the court. It would be helpful for the steel industry if the court permits recommencement of mining in selected mines in Karnataka, as the state government may take more time to submit the plan,” Nowal said.
The state government has appointed the Indian Council of Forestry Research and Education (ICFRE) to prepare the plan for each mine in the three districts. It is said ICFRE may take up to six months to complete the plan.
Till mid-December, the monitoring committee appointed by the court has conducted 16 e-auctions and put up 14 mt of iron ore for sale. Of this, 10 mt were sold and JSW Steel picked up 6.6 mt. JSW’s Vijayanagar plant bought 5.9 mt, the Salem plant took 448,000 tonnes and JSW Ispat won 304,000 tonnes. However, the three companies got a delivery of only 2.7 mt.
“Due to logistical reasons we could take a delivery of less than half of what we bought at the auctions. The state government has allowed the movement of iron ore from 6 am to 10 pm and this restriction has affected our production schedule. It would be difficult for us to resume normal production without the continuous movement of ore,” Nowal said.
He said the company would resume normal production by the end of January. Presently, it has achieved a capacity utilisation of 80 per cent at its 10-mtpa steel plant at Toranagal in Bellary. Kalyani Steels, which has shut one of its three furnaces in Hospet, has appealed to the Central Empowered Committee and the apex court to impose a penalty on erring miners and meanwhile allow it to restart.
R K Goyal, managing director of Kalyani Steels, said the company was running with just one-month stock of ore. “The stock of calibrated ore is running out at the mines and if the court does not allow resumption of mining immediately, then we may have to close down our plants by February,” he said.