Karnataka ore mining to be delayed

Leases with SC panel-nod yet to get legal approvals from Indian Bureau of Mines operations unlikely to start before October

Steel mills in and around Karnataka that are dependent on iron ore from state mines might have to wait for some more time to get fresh supplies, as the resumption of mining is likely to be delayed.

Though the Central Empowered Committee (CEC), appointed by the Supreme Court (SC), has approved 12 firms for resuming operations, following acceptance of their reclamation and rehabilitation (R&R) plans, actual mining might start only by October. Since many of the firms are yet to complete other formalities, such as renewal of plans, they cannot restart mining immediately, industry sources said.

JSW Steel, BMM Ispat, Kalyani Steel and Kirloskar Ferrous, among others, are dependent on iron ore, the key raw material for making steel, from the state’s mines. The SC had banned mining in Bellary, Chitradurga and Tumkur districts in July and August 2011. It permitted auction of about 25 million tonnes of ore from the stockpile to help steel mills tide over the crisis.

“The Federation of Indian Mineral Industries (Fimi), which has been helping the Indian Council of Forestry Research and Education (ICFRE) to prepare the R&R plans, had made available information on 40 mining companies. Of this, the ICFRE had forwarded the names of 12 companies and these have been approved by the CEC. However, these firms are yet to get their plans approved by the Indian Bureau of Mines (IBM) before they restart mining,” D V Pichamuthu, director-south, Fimi said.

Till now, the CEC has approved 12 mines with over 50 hectares lease area from both ‘A’ and ‘B’ categories. Three of these are in the ‘B’ category. It is expected that these together would bring about three to five million tonnes of ore to the market. In all probability, these mines would start operations by October and fresh ore would be made available for electronic auction by the first week of October.

The 12 mines that have received approval to restart mining are: Mineral Enterprises Ltd, B Kumara Gowda, Sesa Goa, Nadeem Minerals, Kumaraswamy Mineral Exports, Praveenchandra, Allam Prashant, VESCO, Mysore Minerals Ltd (two leases) and NMDC (two leases). NMDC is already allowed to mine about one million tonnes per month.

Meanwhile, the state government has sold 23 million tonnes of ore through electronic auction.

“The SC has directed the CEC to sell the ore only through auctions till April 2014,” H R Srinivasa, director, department of mines and geology, government of Karnataka, said.

He said the mining plans of many of these mining companies have expired and some of these have applied to IBM for renewal of their plans. “Normally, the plans are issued for five years. Presently, many of the mines cleared by CEC have to renew their mining plans. IBM is doing their job on a fast-track basis and it has to rework the production levels for each of these mines,” he said.

Only after securing the fresh plans from IBM will these firms be able to start work on the mines. As there was no mining last year, the internal roads in mining areas have become unusable. The firms will have to carry out preparatory work for some days before they start extracting the ore, Pichamuthu said.

“Some of the mining firms that have their mining plans and leases in place may start mining by end-August. But, there are others whose leases are expiring. Our mining lease is getting expired in October. So, we will conduct mining for only a month or so and then we will have to wait until our lease is renewed. The renewal process takes about a year,” said Basant Poddar, managing director, Mineral Enterprises Limited, which operates a mine in Chitradurga.