Sesa Sterlite awaits SC panel's approval to restart iron ore mines in Karnataka

The company's mining lease is spread over 162 hectares with an approval to mine up to 2.3 mn tonnes, about 38.3% of original capacity, after the CEC approved the company's reclamation and rehabilitation plan

Sesa Sterlite, the largest private largest mining company in Karnataka, is a step away from restarting its iron ore mines in the state.

The company, which has been permitted to extract 2.3 million tonnes (mt) a year following the approval for its R&R (reclamation and rehabilitation) Plan at its mines in Chitradurga district, is awaiting final clearance from the monitoring committee appointed by the Supreme Court (SC).

Although the company is yet to get renewal for its mining lease, which expired in October 2012, the Union of environment and Forests (MoEF) has accorded a temporary work permit to resume operations. It had, however, applied for mining lease renewal a year prior to expiry. The central government has so far issued first-stage clearance to the company and based on this, it has secured a temporary work permit.

Currently, Sesa Sterlite’s mining operations in India are suspended after the Supreme Court imposed a ban on mining in Goa and Karnataka. In Goa, the ban is still in force. In Karnataka, the apex court lifted the ban in April.

“We received MoEF approval for  a work permit in August. But, the state forest department raised a demand for payment of forest development tax (FDT) from 2008 to 2011. Though we had paid all the taxes earlier, we had to pay once again, as the department interpreted the tax matter differently and we did not want to delay getting all approvals further. Now, we have settled all tax matters and waiting for the final approval from monitoring committee,” P K Mukherjee, managing director, Sesa Sterlite, told Business Standard.

The MoEF approval came on August 22, pending renewal of its lease for 20 years. The company’s mining lease had expired on October 20 last year. MoEF also accorded in-principle approval after the forest advisory committee constituted by the central government examined the proposal of the Karnataka government, which had sought prior approval under Section 3 of the Forest (Conservation) Act, 1980.

The central empowered committee (CEC) has classified Sesa Goa’s mines under Category B. The company’s mining lease is spread over 162 hectares, with an approval to mine up to 2.3 million tonnes,  38.3 per cent of its original capacity, after the CEC approved its reclamation and rehabilitation plan.

The commencement of mining by Sesa Sterlite is keenly awaited by the steel industry, as it has the highest mining capacity. The steel industry is currently assured of only 5.7 mt from 15 mining companies from both A and B categories besides another nine million tonnes from state-owned NMDC. The steel industry requires about 35 mt per annum to run at full capacities.

“We are ready to start mining anytime once the approval comes. We have kept our men and material in prepared condition so that we can start the work immediately as we have not retrenched any of our workers,” Mukherjee said.

The company expects to start mining operations during the current quarter (Q3, FY14), following the forest clearance, and would operate under deemed extension till the mining lease gets renewed.