Steel mills want transparent allocation of mining leases in Karnataka

Steel makers have made a strong pitch for allocation of new iron ore mining concessions through a transparent and competitive bidding process in Karnataka to end-users.

They have also strongly objected to the state government’s recent move on recommending (to the central government) a mining lease to a merchant miner.

“It is an irony that the Karnataka government has rejected applications of all the steel companies and recommended mining concessions in favour of MSPL, already having iron ore mining leases of more than 700 hectares in Karnataka. The state government has hurriedly recommended the lease without competitive bidding and this step will discourage investments in the state,” the Karnataka Iron and Steel Manufacturers’ Association (Kisma) has protested in a letter to Prime Minister Narendra Modi.

Kisma has urged intervention to set aside the recommendation in favour of MSPL. And, to allocate mineral concessions only by auction, through an open and competitive bid process. JSW Steel, Kalyani Steel and BMM Ispat are among the members of Kisma.

In Karnataka, all iron ore mining concessions allocated so far are either to merchant miners or to individuals. None was made to the steel industry, depriving the industry of raw material security, said Vinod Nowal, president, Kisma.

The steel industry has invested about Rs 80,000 crore in Karnataka and the state accounts for 25 per cent of national output. However, since 2011, the industry has been facing acute shortage of raw material. It is forced to source them from other states and from abroad, said Nowal.

“Under such circumstances, we are shocked to hear that the state government has recommended a large mining concession to MSPL, a merchant mining company, without considering end-use of the mineral by the applicant for captive use of plant and capacity enhancement of existing plants,” he said.

On November 5, the state government had sent a recommendation to the Union ministry of mines, for allocation of a concession to MSPL for 204 hectares at the Haddinapadu mines in Sandur taluk of Bellary district.

“We had applied for the mining lease in 2003. The government has made the recommendation as per the Supreme Court order and there is no direct favour to us,” a MSPL spokesperson said.