State told to ensure iron ore supply to mills

The Associated Chambers of Commerce and Industry of India (Assocham) has urged the Karnataka government to undertake a detailed review of iron ore mining leases and highlight the needs of steel units before Supreme Court-appointed Central Empowered Committee while framing new rules.

“Mining should be moved from the unorganised sector to organised if it is to be done in a legal, scientific and environment-friendly manner. But, any interruption in supply of iron ore to the steel industry will throw hundreds and thousands out of jobs and their dependents will suffer,” the chamber said.

The mines in Karnataka supply iron ore to several large steel plants like JSW, Kirloskar Ferrous, Mukand Ltd and Kalyani Steels. The state also supplies raw material to units located in Maharashtra, Gujarat, Andhra Pradesh, Tamil Nadu and, dozens of small and medium-sized sponge iron units.

“Absence of iron ore supply would be a death blow to the steel industry which is already grappling with numerous other problems,” said Assocham’s secretary general D S Rawat in a communication to Karnataka chief minister B S Yeddyurappa.

One of the observations made by the Lokayukta is that several mines entered into raising contracts and transferred mining leases without the state government’s permission in contravention of Rule 37 of the Minerals Concession Rules 1960.

“There is an apprehension that in case a conclusion is arrived at by the apex committee without studying individual agreements and makes a prima facie determination of illegality, it could result in wrongful closure of many mines,” said Rawat.

Steel, iron and other industries have invested Rs 62,000 crore in the landlocked Bellary-Hospet region as it has abundant availability of iron ore. “Shutting down of these industries will also cause losses of immense magnitude to the state exchequer,” the chamber said.

Assocham fully supports the government in ensuring effective implementation of rules and regulations by adhering to systems and procedures as stipulated by various governmental agencies. “We would like to re-emphasise that a decision regarding closure of any mine should be done judiciously after investigating all aspects,” Rawat said.