Steel majors ArcelorMittal, Posco, Tata Metaliks, JSW Steel, Bhushan Steel, NMDC and KIOCL among others are likely to be allotted captive iron ore mines in the iron ore-rich Bellary district of Karnataka as the state government has taken another step in this direction, a top government official said.
“We had identified two blocks of iron ore mines in Ramanadurga and Kumaraswamy hill ranges in Bellary for allotment under the new mining policy of the state. There were over 1,000 applications for mining lease and we have just completed the hearing of all applicants. The government will send the list of eligible applicants to the Centre for prior approval within a month,” B S Ramaprasad, secretary to government, mines, SSI and textiles told Business Standard.
He said this is the first time in the last decade that the government has done such large-scale hearing for two major blocks of iron ore in the state. The department of mines has identified 1,560 hectares of iron ore mines in block 13/1 of Ramanadurga region which is rich in iron ore reserves. It is estimated that this block of mines contains over 200 million tonnes of iron ore. The second block of iron ore mines, spread over 1,000 hectares in block 13/2, is located in the Kumaraswamy Hill range. The extent of iron ore in this block is yet to be ascertained.
Ramaprasad said the department was in the process of listing out the eligible candidates for the allotment of iron ore mines and the list will be prepared in a month and sent for approval of the chief minister who looks after the mines department. Once the chief minister approves, the list will be sent to the Centre for its prior approval, he said. It is expected that the process of getting a prior approval from the Centre would take around six months.
However, the state government has already recommended to the Centre to allot mining lease to ArcelorMittal, which is seeking over 250 hectares of mine area in the Ramanadurga region.
Other major steel companies that are seeking iron ore deposits in the state include Brahmani Industries, Essar Steel, the state-owned Visveshwaraya Iron and Steel Limited, Surya Roshni, MSPL among others.
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All these companies had signed a memorandum of understanding with the state government for setting up steel mills in the state during the global investors’ meet held in June this year. The state government has already initiated land acquisition process in the case of ArcelorMittal and Tata Metaliks, which plan to set up 6 million tonne per annum steel plant each in Bellary and Haveri districts respectively.
On the possibility of extent of mine area each applicant would get, Ramaprasad said the government would be able to provide only about 30 per cent of the iron ore requirement and the balance ore has to be procured by them from the open market.
Presently, 320 out 600 lease holders are active in the mining of iron ore in Karnataka. The state cabinet recently approved the forming of a joint venture between state-owned Mysore Minerals Ltd (MML) with three private sector companies for supply of limestone.
Karnataka produces around 40-50 million tones of iron ore annually and exports about 30 million tonnes and makes up one-third of the country’s total exports.