CEC meet to iron out mining issues

Key issues on agenda are mining lease renewals, implementation of R&R plans, e-auctions and opening of remaining mines

The Central Empowered Committee (CEC) of the Supreme Court has convened a meeting in Bangalore on December 20, 2013 to iron out all issues concerning with the restarting of mines in Karnataka.

The major issues on the agenda are renewal of mining leases, implementation of reclamation and rehabilitation (R&R) Plans, e-auctions and opening of remaining mines. The meeting will be attended by members of the Monitoring Committee, Director of Mines and Geology, officials from the departments of forest, revenue and representatives of the Federation of Indian Mineral Industries (FIMI), industry sources said.

The meeting is significant in the current juncture as the steel makers in and around Karnataka are facing acute shortage of iron ore to run their plants. All the steel plants are operating between 40 per cent and 80 per cent in the state.

As against the requirement of 35 million tonnes for the steel and sponge iron plants in the state, the current availability has remained around 14 million tonnes including around 8.5 million tonnes from state-owned NMDC.

Presently, only 15 mines (12 from category A and 3 from category B) are operating in the state of Karnataka with the production capacity of 5.5 million tonnes.

The Monitoring Committee appointed by the Supreme Court to supervise the functioning of iron ore mines in Karnataka, has till now cleared 20 mines.

Out of 108 mines, only 94 mines are eligible to restart their operations as the remaining 14 mines have not given their details for preparing the R&R Plans. Of these 94 mines, the R&R Plans for 22 mines are not approved and the remaining 72 mines are left in the business, which together can produce 28.83 million tonnes. The R&R Plans of 55 mines have been approved till now.

“The availability of iron ore is not improving despite clearance given to 55 mines. Till now, only 15 have started their operations and about 14 million tonnes of iron ore is coming this year including NMDC. The steel industry is badly in need of raw material and given the current scenario, the mills are operating at 40 per cent to 80 per cent of their installed capacity,” said Seshagiri Rao, joint managing director, JSW Steel Ltd.

He said the government should expedite the process of giving renewals to expired leases and issue all approvals to other mines that have got their R&R Plans approved.

The meeting on December 20 is likely to address the pending issues of all the miners that are eligible to restart their mining operations.

The state government has already cancelled mining leases of 51 mines in the Category C following the direction of the Supreme Court. “The government should speed up the process of realloting these mines,” Rao said.

Meanwhile, the state government has moved an application in the Supreme Court seeking approval for increasing the production capacity temporarily within the cap of 30 million tonnes per annum.

The Central government has also moved the Supreme Court seeking a direction to Karnataka to expedite the process of opening up of mines.

It supports Karnataka’s plea to raise iron ore production limit.

* Iron ore production in Karnataka is about 14 mn tonnes in FY14. Could climb to 22 mn tonnes in FY15, provided NMDC ups its output and more mines get approval

* Capacity utilisation of steel mills has dropped to between 40% and 80%

* JSW Steel, the largest producer of steel in Karnataka, is unlikely to meet its production target for FY14. It is likely to achieve 12 mn tonnes, of which around 8 mn tonnes will come from Vijayanagar plant in Karnataka.

* JSW Steel set to face much worse situation in coming months as supply of sub-grade iron ore has also depleted.