Govt mulls body to check illegal iron ore mining

The decision comes after Orissa government crackdown on illegal mining in Keonjhar and Nayagarh region

The government is planning to set up a regulatory body to check illegal mining and transport of iron ore. The regulatory body will be jointly looked after by both the Railways and ports in coordination with state governments.

The decision was taken at a meeting attended by Steel Secretary Atul Chaturvedi, Mines Secretary Santha Sheela Nair and senior officials from shipping and railway ministries. State government representatives were also present. The Orissa government had last month cracked down on illegal mining in the iron ore-rich Keonjhar and Nayagarh region.

“The meeting was called after the Orissa government’s crackdown on illegal mining and pilferage of iron ore in Keonjhar mines. While illegally-mined iron ore finds its way into the export market, more than one million tonnes of imported coal and iron ore meant for domestic steel and power makers is lying at various ports due to shortage of railway rakes,” a senior official told Business Standard.

Officials said in the wake of rising incidents of illegal mining and exports, the mines ministry had asked the shipping ministry to find whether royalty on legally-mined iron ore had been paid or not.

Last month, the Orissa government banned illegal mining. Large quantities of illegally-mined iron ore was seized by the government.

Similarly, in southern India, some major mines have been shut down on the direction of state governments, which have been trying to check illegal mining and misuse of permits.

The central government is planning to impose 15-20 per cent duty on iron ore exports. This will be the second such move by the government to curb exports and stabilise the domestic prices. In December last year, the government had imposed 5 per cent duty on export of iron ore fines and increased the duty on lump iron ore from 5 per cent to 10 per cent.

According to analysts, an increase in prices of iron ore could put pressure on headline inflation, which is rapidly inching towards 10 per cent. Companies such as Steel Authority of India Ltd, Tata Steel, JSW and Essar have all increased prices, citing higher input costs and supply shortages.