Iron ore mining comes to a halt in Karnataka, again

Mineral Enterprises, the only company to secure all clearances, suspends ops

Bangalore-based Mineral Enterprises Limited (MEL) has suspended mining operations at its iron ore mine in Chitradurga district after its lease period expired on October 6. The company has managed to produce 35,000 tonnes in one month.

MEL was the first company to get all the statutory clearances to restart mining in Karnataka. With the suspension of mining by MEL, the mining has once again come to a standstill in Karnataka as 11 other mines in the Category A are yet to secure all statutory approvals.

“We have produced about 35,000 tonnes in one month till October 6, 2012 as our mining lease expired. We were the first to secure all clearances like approval for mining plan from the Indian Bureau of Mines, approval from State Pollution Control Board, and environment clearance,” Basant Poddar, managing director, MEL, said.

The company commenced mining about thirteen months after the ban was imposed following the direction of Supreme Court. MEL’s mining lease is classified under Category A mines in Chitradurga district, about 225 km from here. It operates iron ore mine spread over 102 hectares in Bedarabomma-nahalli of Chitradurga taluk and district.

“We have written to the Monitoring Committee, appointed by the Supreme Court to oversee e-auctions, to put up for auction about 35,000 tonnes. However, we are yet to fix the base price for auction,” Poddar said.

He said the company would apply for temporary work permit to continue mining once the state forwards their application to the Central government for renewal of lease.

As per the new mining plan approved by the Central Empowered Committee of the Supreme Court and IBM the company was allowed to produce 380,000 tonnes per annum as against its original sanctioned capacity of one million metric tonnes. The company largely produces low-grade iron ore (below 63 per cent Fe).

Poddar said the lease expired on October 6, 2012 and it had applied for the renewal. However, the process of getting the lease renewed takes up to one year, he said.

The mines and geology department has stipulated that the sale of iron ore will continue through e-auction conducted by the Monitoring Committee and 90 per cent of the sale price (excluding royalty and applicable taxes) will be paid to the company directly by the buyer and the balance 10 per cent will be deposited with the Monitoring Committee along with the royalty, FDT and other applicable taxes.