Regulatory hurdles delay resumption of iron-ore mines in Karnataka

Only 15 mines have resumed mining with a combined capacity of 5.72 million tonnes per annum

Even as the Supreme Court allowed the reopening of iron-ore mines in Karnataka seven months ago, most are still waiting for regulatory approvals to restart operations. Only 15 (12 from Category A and three from Category B) with a capacity of 5.7 million tonnes (mt) a year have restarted operations.

Ore availability for steel mills (including JSW Steel's) in and around Karnataka continues to be far below their annual requirement. Against a total annual requirement of 35 mt, the supply of ore is 14 mt. State-owned NMDC continues to be the largest producer of iron ore in the state, with eight-nine mt a year.

The court, in its April 18 order, allowed mining leases under Category A and B to start operations. Its appointed Central Empowered Committee (CEC), in its final report given on February 3, 2012, had classified mining leases in Categories A, B, and C based on illegalities. The court had also capped the ore production at 30 mt a year.

To speed the process of approvals to mining leases, the state Department of Mines and Geology recently held individual meetings with all mining companies under Category A and B.

 

Meanwhile, the miners have expressed dismay at the delay in approvals from the state.

"There are many held-up key approvals, including the clearance from deputy commissioners, for some in the revenue areas. The officials in the Department of Mines and Geology and the Mines Secretariat are not speeding the process," said Basant Poddar, managing director of Mineral Enterprises Limited (MEL) and vice-chairman of the Federation of Indian Mineral Industries (FIMI). Of the 99 leases cleared by the CEC, 15 have restarted mining. Another 37 have expired and are waiting for approval, he said.

The CEC has approved 70 mines of 16.4 mt, while 29 are yet to get their reclamation and rehabilitation (R&R) plans approved. MEL and Sesa Sterlite's are among the 37 mining leases waiting renewal. While Sesa has received Stage-I clearance and working permit pending Stage-II clearance, the MEL is yet to get Stage-I clearance from the Centre. These two mining leases could bring 3 mt of ore a year.

Poddar said the officials in the state were not ready to sign any documents pertaining to mining, fearing action after the arrest of former additional secretary Shamim Banu in a corruption case related to mining in Bellary earlier this year.

JSW Steel and Kalyani Steel are running below capacity. Several sponge iron units have shut shop in two years, as those could not afford to buy ore from state agencies through e-auction.

Poddar, however, was confident both MEL and Sesa would get all the approvals and start mining before the end of current financial year. Sesa is likely to start mining by December-end.