KIOCL asks Karnataka to reserve mining lease under new Act

Company has submitted around 23 mining lease applications for grant of ML to the state govt

Steel ministry undertaking KIOCL Ltd has identified four iron ore bearing areas in Ballari district and submitted a proposal to Karnataka for grant of Mining Lease with a request to reserve these iron ore areas under Section 17 a 2(A) of MMDR Amendment Act 2015 in its favour as it is a public sector undertaking.

“The subject is being taken up with government of Karnataka at various levels for grant of iron ore mining lease to KIOCL under the provisions of Section 17 a 2 (A) of MMDR Amendment by reserving suitable areas bearing iron ore for sustenance of pellet plant of the company at Mangaluru,” Malay Chatterjee, Chairman and Managining Director, KIOCL, said.

Speaking at the K C Khanna Memorial Lecture organised by the company to mark the annual day of the company, he said the time has come to obtain mining asset from the government of Karnataka and rejuvenate the company. The KIOCL Limited has been sourcing iron ore for its pellet plant from NMDC’s Chhattisgarh mines since 2006 after it shut down captive mines at Kudremukh following the Supreme Court ruling.

Since then, KIOCL has been looking for new mining leases for iron ore deposits in Karnataka to ensure supply of raw material to plants in Mangaluru. Due to non-captive source of iron ore, KIOCL is unable to meet iron ore requirement of pellet plant at Mangaluru and plant operation is becoming unviable proposition, he said.

KIOCL has been putting continuous efforts to secure iron ore mining lease in Karnataka. The company has submitted around 23 mining lease applications for grant of ML to government of Karnataka for various iron ore deposits. The state government has conducted hearings in the year 2010 for some of the ML applications. However, till date no mining lease was allotted to KIOCL, Chatterjee said.

Recently, Chief Minister Siddaramaiah announced in a written reply to a question in the legislative assembly that as per the MMDR Amendment Ordinance 2015 state government has the power to give mining lease to government companies without auction and government will give preference to KIOCL for granting mining lease.

In an effort to stay in the business, the company recently commissioned a study by international consultancy firm PwC, which has recommended for its merger with another public sector mining giant NMDC Limited. Currently, NMDC is also conducting a similar study by Deloitte, Chatterjee said adding that it would be appropriate for the state government to allot a mining lease to KIOCL for its long term sustenance.