Karnataka govt urges SC to allow 117 mining firms to restart ops

The Karnataka government has urged the Supreme Court to allow 117 mining companies to resume iron mining in the state. The Central Empowered Committee (CEC), appointed by the apex court to probe illegal mining in the state, had recently recommended for permitting these mines to restart mining.

“It is learnt that a few mines have been cleared by CEC, wherein no significant illegality or irregularity has been noticed. These mines, classified as “A category”, may kindly be allowed to operate without hindrance,” S V Ranganath, chief secretary, government of Karnataka, said in an affidavit filed before the Supreme Court.

Similarly, there are some other mines, which have been enumerated as “B category”, for reasons of some or the other kind of illegality or irregularity noticed by the CEC. “Such mines may also be kindly allowed to operate and the state government would undertake to ensure all material safeguards in place and due diligence is exercised by all agencies as per the orders of the Supreme Court,” he said.

The chief secretary has further added the government will take whatever action as directed by the Supreme Court in respect of those mines classified under “C category.”

The CEC in its report submitted to the apex court on February 3, had recommended for cancellation of 49 mining leases in the ‘C Category’ and reauctioning of those leases as per the current market prices.

Some of the mines classified under ‘A category’ include NMDC, Mineral Enterprises Ltd, and two leases of Mysore Minerals Ltd, among others. ‘Category B’ includes Sesa Goa, MSPL, Sandur Manganese and Iron Ores Ltd and Mysore Minerals Ltd, among others.

The CEC has recommended for cancellation of ‘Category C’ leases after paying the penalty. They include Canara Minerals, Associated Mining, Trident Minerals, Deccan Mining Syndicate (P) Ltd and V S Lad & Sons, among others.

The state government has also assured the court that it would give preference to value addition industry while granting mineral concessions as per the new mineral policy of the state.

“The state government, in principle, has agreed to support project proponents by way of recommendation to the government of India for allotment of captive mines to end users (those how have already invested or going to invest in steel industries in Karnataka).”

The government has also pleaded the court not to put a cap of 30 million tonnes on the production of iron ore, as it would be detrimental to the steel industry. “The cap suggested in the CEC report appears to be based on the present consumption pattern rather than on the considerations of the sustainability of the environment as mandated by the Supreme Court. This cap, thus, need to be revisited and reappraised.”

Karnataka currently produces about 14.36 million tonnes of steel annually, about 26 per cent of the national production. The existing steel units require about 25 million tonnes of iron ore annually.

JSW Steel operates India’s largest single location steel plant with a capacity of 10 million tonnes per annum at Torangallu in Bellary district. It is also in the process of expanding the capacity to 16 million tonnes at an investment of Rs 18,000 crore.

During the global investors’ meet (GIM) held in June 2010, the state government signed 50 investment proposals worth Rs 2.5 lakh crore in the steel sector. The top seven projects are from Arcelor Mittal India, Posco India (P) Ltd, Bhushan Steels Limited, Tata Metaliks Ltd, Hazira Steels Limited and expansion of JSW Steel.

In addition to the above, National Mineral Development Corporation (NMDC), a public sector mining giant has proposed to set up a three million tonne steel project at a cost of Rs 20,000 crore in collaboration with OAO Severstal of Russia for manufacturing special grade steel.