Karnataka dept for cancelling of 14 mining leases in categories A & B

SC had allowed these mines to resume operations subject to statutory conditions in order dated April 18

In what could be considered as fresh trouble brewing for the iron and steel sector in Karnataka, the mines and geology department, government of Karnataka, has recommended premature termination of 14 iron ore mining leases from Categories A and B in the state.

The recommendation comes even as the Supreme Court, in its April 18 order, had allowed these mines to restart mining.

The Director of Mines and Geology (DMG), government of Karnataka, (in letter dated June 3) recommended cancellation of the leases, with 16 other mines in Category C over the last two years, on the grounds of violating lease deed conditions, illegal mining by way of encroachments and defects while granting lease.

According to the recommendations, 14 leases were from Categories A, B and 16 from Category C, while one lease did not belong to any category. The 14 leases are: Varalakshmi Mining Co and Shreesha Enterprises (both Category A), K R Kaviraj, K N Srinivasa, K M Parvathamma, N Shaik Sab, Mehaboob Transport Co, Hind Traders, S B Minerals, N Rathnaiah, Raghavendra Rao (Janthakal Enterprises), Kumaraswamy Mining Co, Narayana Mines and Omkaramma (all Category B).

If the government accepts the recommendations and terminates these, eight million tonnes of iron ore will not be available to the market, causing further delays in the normalisation of production by steel companies.

The Supreme Court had ordered resumption of all Categories A and B mines, while cancelling the leases of 51 in Category C.

The Director of Mines and Geology Department H R Srinivasa had recommended termination of these 31 leases from October 2011 on the grounds of various other violations. In the case of 29 leases, the director had recommended termination before the Supreme Court order on April 18, while the recommendation for termination was made for two other mines (Narayana Mines and Pattabhiramaiah) after the apex court order.

Recommendations have been sent to the secretary, mines, SSI & textiles under the department of commerce and industries, to terminate the leases of these mines twice over the last two years. However, the state mines secretary rejected the proposal of the DMG on the grounds that some of these mines were included in Category C, for whom the apex court had ordered cancellation, sources said.

“These are those mining leases who have committed serious illegalities. And without taking timely action, proposals are sent back and as a result precious time is lost, and if illegal miners are not punished and there will be no check on illegal activities,” Srinivasa said in his latest letter to the mines secretary.

He has requested the Mines Secretary to take action on the proposals (other than Category C mines) without any further delay.

These 31 mines together account for about 8 million tonnes of iron ore after the Indian Bureau of Mines (IBM) reworked their capacities. The original capacity of these mines as per the sanctioned plan is about 28 million tonnes.