Iron ore mining comes to a standstill in Karnataka

Iron ore mining is coming to a standstill in major production centres in Karnataka even as the court battle against the state government’s ban on exports is yet to reach a conclusion. Exports from the state have already come to a halt.

Two months since the ban came into force, almost one-third iron ore mines in the state have wound up operations and many others have scaled down production. Only mines in the Bellary-Hospet-Sandur region, which produce high-grade iron ore, are operational due to demand for their products in the domestic market. However, they are working at less than 50 per cent capacity.

The producers of low-grade iron ore in Tumkur and Chitradurga regions have shut operations as there is no demand for their products in the domestic market. Out of 90 operational mines in the state, 30 have closed down. A little more than three million tonnes low-grade iron ore is stocked in their mines, causing losses worth crore of rupees to the miners.

As against the monthly production of 3.5 million tonnes, mines in Karnataka are churning out less than 1.5 million tonnes. In the last two months, the miners have sold hardly 800,000 tonnes high-grade iron ore to domestic steel mills, say industry sources.

In Karnataka, which contributes around 30 per cent to the country’s iron ore exports at 30 million tonnes annually, about 75 per cent iron ore is low-grade and only 25 per cent is high-grade.

“We have managed to pay wages to employees for two months now thinking that the court case will come to an end early. But, we cannot continue to pay them wages without work. If the court verdict does not come early, things will worsen,” said Basant Poddar, managing director, Mineral Enterprises Limited, a producer of low-grade iron ore in the Tumkur region.

The mines in Tumkur and Chitradurga regions employ around 2,000 workers directly, who earn between Rs 200 and Rs 500 per day depending on the additional working hours. Already, tractor drivers, lorry operators and daily wage earners have lost their jobs.

These workers are planning to take a delegation to the chief minister by the end of this month to seek withdrawal of the export ban.

On July 26 this year, the Karnataka government imposed a ban on export of iron ore from ports in the state and subsequently restricted the issue of mineral dispatch permits on July 28 for movement of iron ore to domestic steel mills.

Some iron ore producers that have stopped their operations include Mineral Enterprises Limited, Tumkur Minerals, Lata Mines, Milan Minerals, S N Singh, Ganapathi Singh, Sudarshan Singh, Balaji Produce Co and Dasharath Ram Reddy.