KIOCL pleads for review of mining stoppage

Despite over 300 million tonnes of iron ore reserves, Kudremukh Iron Ore Company Ltd (KIOCL) is unable to exploit the resources as it has fallen victim to "NGO over-activism" and has petitioned Supreme Court to review its order that brings an end to mining activity there in December.

"We are waiting for (the court decision to go ahead with our plan to invest Rs 200 crore for the 1,00,000 tonne plant," KIOCL chairman and managing director P Ganesan told reporters here. On a petition filed by a Bangalore-based NGO alleging that the mining activity was damaging the ecology, the apex court had on October 30, 2002 restrained the company from mining the primary ore lying beneath the surface, but allowed it to tap ore from the "broken area" and the "weathered ore."

The company, a mini ratna, contends that this order will render infrastructure worth Rs 4,000 crore redundant, besides a loss of $400 million of export earnings and Rs 200 crore revenue to the government, Ganesan said.

The National Institute of Rock Mechanics and an independent Canadian agency had suggested building a natural slope in the mines for safety and land purposes.

"If granted by the Supreme Court, this will last another 2-3 years. However, if we are allowed to mine the primary ore region, we would be able to provide iron ore to both domestic industry and overseas customers for 10-12 years," the chairman said.

There will be a loss of around Rs 560 crore to the national exchequer by means of dividend, excise duty, income tax besides affecting the new Mangalore port which could incur loss of about 35 per cent of its revenue after KIOCL's mining operations are brought to a standstill, Ganesan said.

Asserting that KIOCL had been making profit for the last 14 years and was without any loan against its accounts, he said the PSU's performance even preceded the boom due to high Chinese demand that had resulted in turning around several companies.

On whether NGOs were harming development activities in the country in the name of ecological concerns, he said, "We want all the issues to be examined objectively by both the court and the NGOs. "Ecology and economics have to co-exist. They cannot serve cross purposes," he added.

Ganesan said KIOCL was also looking at alternatives, including a Rs 1,200 crore 50:50 joint venture with Steel Authority of India to develop Kalta, Taldih and Barsua mines in Orissa where mining and steel sectors look poised for a great take off.

"To keep our pellet plant running at Mangalore, KIOCL is looking for an iron ore deposit of about 200 million tonne at Ramanadurg at Bellary Hospet area in Karnataka," the KIOCL chief said. However, the matter is sub-judice, he added.

To a question about the fate of its nearly 2,000 employees, Ganesan said, "The merging areas offer scope for their redeployment. We are also awaiting supreme court decision on the issue to settle it finally."