Karnataka keen to revive mining activity

Karnataka is keen to resolve issues confronting the mining industry and revive its activity in the state soon, Law Minister T.B. Jayachandra said Wednesday.

"We have set up a cabinet sub-committee to address the issues plaguing the mining industry and restore its operations despite legal constrains," Jayachandra said here at a day-long conference on "Mining in Karnataka: Restoring normal operations".

Stressing on the need for value addition to iron ore to generate employment in the state and increase royalty to the exchequer, Jayachandra told industry stakeholders that the sub-committee would identify and reserve mining areas in revenue as well as forest land to prevent setting up of any other industry on them.

The Supreme Court banned mining activity in the state following the multi-crore-rupee mining scam unearthed by the Karnataka Lokayukta (ombudsman) in 2010-11.

State mining secretary Tushar Giri Nath told industry participants that the state government would soon ensure resumption of category A and B mines to produce iron ore for the steel industry.

"We are upgrading infrastructure in the mining areas to grant more licenses and scale up iron ore production," Nath said at the conference organised by the Associated Chambers of Commerce and Industry of India (Assocham).

Highlighting problems faced by steel and allied industries, Assocham southern region task force chairman Vinod Nowal said that as against 36 million tonnes required by the industry, only 18 million tonnes was available though the Supreme Court permitted mining of 30 million tonnes per annum.

Referring to the 12 percent forest development tax imposed by the state government on mining, Nowel said the levy was a burden on the industry in the state as it was enforced in other states.

"The forest development tax makes steel production costlier in Karnataka than in other states. The state government should review the levy and abolish it in the interest of the industry, which was contributing substantially to the state exchequer by way of other taxes," said Nowel, also the chief executive of JSW Steel Ltd.