Miners seek capacity enhancement for operational mines

Federation of Indian Mineral Industries have stated that a large number of mines are not in a position to restart mining due to smaller capacities

Iron ore miners from Karnataka have sought permission from the Supreme Court to increase the production of operational mines so as to achieve 30 million tonne per annum production. The move comes in view of the shortage of raw material to steel mills in and around the state and inability of other mines to resume production.

In an affidavit filed before the Supreme Court, the miners under the banner of Federation of Indian Mineral Industries (FIMI) have stated that a large number of mines are not in a position to restart mining due to smaller capacities. The Apex Court is set to resume hearing on the matter on March 9, 2015.

The FIMI has asked the Supreme Court to direct the Central Empowered Committee (CEC) to consider expeditiously and take decision wherever additional reserves have been found through subsequent exploration or overburden dumping capacity has increased due to sale of sub-grade iron ore or additional infrastructure capacity is available due to the non-operation of adjoining mining leases.

The appeal comes in the wake of recommendation of the CEC that the annual production of each mine in the state be restricted based on the available resources, dumping area and road / surface transport capacity subject to the total mine-wise production not exceeding 30 million tonnes per annum.

Of the 115 mines in A and B categories as classified by the CEC, 19 mines have not come forward or are not able to come forward for preparation of R&R Plans and R&R Plans for five mines are pending approval with the CEC and Indian Council for Forestry Research and Education (ICFRE), which was entrusted the job of preparing R&R Plans.

Only 91 mining leases out of the 115 leases categorised in the A and B categories have approved R&R Plans. Of these, only 22 mines have actually re-commenced operations, after almost three years of court judgement. The total permitted production as per CEC approvals obtained by these 22 mines is 7.419 million tonnes per annum. Currently, the total production of iron ore is around 20 million tonnes including that of NMDC and MML. The steel industry requires around 35 million tonnes per annum in Karnataka.

“Thirty four mines have approvals for producing 50,000 tonnes per annum. A mine producing ore at these levels is unlikely to be sustainable. As such, these 34 mines are unlikely to commence operations,” said Basant Poddar, Vice-President, FIMI.

He said as a matter of fact, production levels of less than 120,000 tonnes per annum will severely impact sustainability. Hence, the production at levels as low as 50,000 tonnes per annum are not at all sustainable.

According to the affidavit filed by FIMI, of the remaining mines, which have been granted approvals from the CEC, only 14 mines are likely to restart in the next 12 months, i.e., by January to March 2016. The total annual production approved by the CEC in respect of these 14 mines is 5.427 million tonnes per annum.

As such, the total aggregate output in 2016, taking into account the production of mines whose operations have already commenced, and the 14 mines commence production by January 2016, will only be 12.846 million tonnes per annum (excluding output based on ad hoc permissions granted to NMDC and MML by the court).

Twenty of the remaining mines not accounted for above are not expected to restart operations for at least 12 months from today, and may take up to 60 months, i.e., five years from today, to commence operations, if at all they do, the affidavit said.

“The application deserves to be granted since the continuing shortage of domestic supply has severe adverse impacts on the economy as a whole”, the FIMI said.