Iron ore cap in Karnataka still not enhanced despite Supreme Court's order

Last month, Supreme Court has enhanced the cap, limit to iron ore mines in Karnataka, by five million tonnes to 35 million tonnes. However, industry representatives have said that the cap not increased, which resulted in loss of around Rs 6.5 billion to the Karnataka Government and for the industry.

The apex court has lifted the five-year-old ceiling from 30 million tonnes to 35 million tonnes for the A and B category mines.

In a letter to the Chairman of Central Empowered Committee, H M Khyum Ali, Director, Federation of Indian Mineral Industries (FIMI), South, on Wednesday has requested the latter to decide on the pending enhancement proposals.

Meanwhile, representatives from the industry have said that the monitoring committee has called for few meetings and asked for some information, which was submitted but nothing has moved now.

They alleged that due to delay in implementing the apex court's direction, the state has lost around Rs 1.2 billion revenue and the industry lost around Rs 5 billion of revenue.

Basant Poddar, former Chairman and senior member of FIMI-South said, "...this has resulted in grave negative economic and environmental repercussions, with Karnataka buying ores from eastern India as well as import."

All the enhancement proposals have been technically evaluated under the three parameters of dumping capacity, reserves & resources, carrying capacity by the relevant authorities and CEC on March 2017 has referred the cases to monitoring committee for sending their observations as well, which the Monitoring Committee is unnecessarily stretching, alleged Ali.

A senior official from the monitoring committee refuted the allegations as baseless and said that the Committee examines things based on merits.

"The committee is mandated to examine all the proposals and it will submit a report to the Central Empowered Committee. It will come out with its decision at the appropriate time. The monitoring committee has already sold 150 million tonnes of material from all these mines," said the official.

Industry sources said after the ban was lifted in April 2013, the enhancement in production capacity would boost industries in the region. It will also ensure smooth supply of raw material to the steel industry which otherwise buys from outside the state or even sometimes imports at a cost three times higher.

Thirteen mining lessees in Karnataka had filed a petition before the SC in May 2016, urging for an enhancement of the permissible annual production limit in respect of Category A and B mines. Based on the Central Empowered Committee's (a body set up by the court) instruction, the state government in August 2017 asked its department of mines and geology to technically evaluate the proposals. The process of reaching a consensus there is yet to conclude.

According to industry sources, the total potential for iron ore mining is 50-60 mt a year, of which A & B categories are 40-50 mt. With the SC's cap, only 30 mt could be mined in a year, now enhanced to 35 mt.