Fresh mining leases on anvil

Out of 115 mines from category A and B allowed by the SC to operate, only 21 mines have restarted with a production capacity of 9.7 mn tonnes annually

The Karnataka government will hasten the process of issuing fresh iron-ore mining leases to improve the supply of raw material, according to Kaushik Mukherjee, chief secretary, government of Karnataka.

The government's move comes in the wake of Supreme Court rejecting Karnataka's demand to increase the cap on iron ore production to 40 million tonnes per annum from 30 million tonnes per annum.

Responding to a question at the concluding session of 20th Partnership Summit organized by Confederation of Indian Industry (CII) in Bangalore, Mukherjee said, "We have decided to give new leases to achieve 30 million tonnes of iron ore production per annum."

The representatives of Karnataka Iron and Steel Manufacturers Association and Association of Indian Mini Blast Furnaces also held discussions with Mukherjee and Tushar Giri Nath, secretary of mines and geology in the state government, and appealed for faster clearances to pending A and B category mines in order to increase the raw material output.

The steel industry has an installed capacity of 19 million tonnes per annum in and around Karnataka and requires about 40 million tonnes of iron ore per annum.

However, the supply has touched only 9.70 million tonnes per annum currently as only 21 mines have restarted production.

Besides, the state-owned NMDC Ltd produces another 8-9 million tonnes per annum.

The Supreme Court has fixed the production cap at 30 million tonnes per annum.

Later, briefing reporters on the outcome of their meeting with the government officials, Vinod Nowal, deputy managing director, JSW Steel said the mines secretary has assured the industry representatives to hold a meeting on February 3, 2014 to iron out the pending issues.

We have requested the government to immediately issue clearances to some 5-6 mining leases, so that the production can be enhanced to 22 million tonnes in the next two to three months, he said.

Iron ore production could be increased to 26 million tonnes in the near future, if the government takes effective steps, he said.

"There is a huge a shortfall of production of around 12 million tonnes to meet the cap of 30 MTPA imposed by the Supreme Court, let alone the existing requirement of 36 MTPA of the iron and steel industries in Karnataka," Nowal said.

The industry bodies have also urged the state government to go aggressively in the Supreme Court, when the hearing comes up on February 24.

The Apex Court, earlier this week, told the state government to submit a detailed action plan before the next hearing on the method it plans to use to achieve 30 million tonnes per annum production of iron ore.

"We have also requested the state government to speed up the process of issuing fresh mining leases, so that the new leases become operational in the next one to two years," Nowal said.

Meanwhile, the blast furnaces, pig iron, sponge iron plants and integrated steel plants are operating between 60-80 per cent of their capacity in the state due to acute shortage of iron ore.