Iron ore supply to steel mills likely to take more time

Category B mines await SC nod to resume mining in Karnataka, CEC has cleared R&R plans of 23 mines with combined capacity of over 6 million tonnes per annum

Iron ore-starved steel industry in and around Karnataka might have to wait for a longer period to get smooth supply of key raw material for its blast furnaces as the opening of Category B mines, which contain larger deposits, is getting delayed.

The delay is due to non-fulfilment of certain conditions imposed on these mines by the Supreme Court.

The Court is likely to hear the appeal for opening of Category B mines at the next hearing on January 8, 2013, industry sources said.

The Supreme Court (SC) appointed Central Empowered Committee (CEC) has approved the reclamation and rehabilitation (R&R) Plans of 23 mines under Category B in Karnataka. These mines, which can together produce over six million tonnes of iron ore per annum, are presently awaiting the apex court's nod to resume mining.

Opening of Category B mines is very vital for the steel industry in Karnataka, as the annual permissible production expected from these mines is relatively larger. Currently, the industry is dependent on only four mines in Category A that have started mining and produce close to two million tonnes per annum besides 12 million tonnes from National Mineral Development Corporation (NMDC).

There are 63 mines under Category B.

SC's permission to these mines is delayed, as these mines are yet to submit an undertaking to pay additional amount as penalty for violating mining norms.

The apex court, in its order dated September 28, 2012 directed that before considering resumption of mining operations in Category B, these mines should pay a compensation of Rs 1 crore per hectare for the areas under illegal overburden dumps roads, among others, outside the sanctioned lease area and Rs 5 crore per hectare for illegal mining pits outside the sanctioned area.

Each lease holder besides making payment as directed above must also give an undertaking to CEC for payment of additional amount, if held liable on the basis of final determination.

The SC directed constitution of a committee to determine the amount of compensatory payment to be made by each of the leaseholders with regard to the value of ore, illegally extracted from forest and non-forest land, falling within or outside the lease area and the profit made from such illegal extraction and the resultant damage caused to the environment and the ecology of the area.

The committee would decide the guarantee money for implementation of the R&R plan in the respective sanctioned lease areas, the SC said in its order.

“Even after two months, the committee is yet to be constituted. Many of the Category B mines leaseholders are yet to submit the undertaking to pay additional amount as finally determined,” Vinod Nowal, President, Karnataka Iron and Steel Manufacturers Association and Director of JSW Steel said in a representation to Karnataka government.

The road map for opening the Category B mines is absolutely unclear as the initial step itself is taking longer time. These mines can resume the operations only after implementation of R&R plan in the encroached area, which is likely to take considerable time, he said. However, till now, none of the Category B mines have submitted any undertaking to the CEC for payment of additional compensation.