Mines ministry urged to provide captive mines to steel industries

Karnataka industry body has also sought allocation of coal linkages to sponge iron industries in the state

The Federation of Karnataka Chambers of Commerce and Industry (FKCCI) has asked the Union Minister for Mines and Steel Narendra Singh Tomar to allot captive mines for the existing steel and sponge iron industries based on their capacities. It has also sought allocation of coal linkages to sponge iron industries in the state.

“The Supreme Court has lifted the ban on mining activity with respect to mines not affected by scams. Small and medium industries cannot compete with large industries in terms of procurement of the raw materials. There is a need to evolve methods for level playing conditions,” said S Sampathraman, president, FKCCI.

In a memorandum to the minister who was here last week to discuss various issues in the mining sector with chief minister Siddaramaiah, the FKCCI called for revisiting the present sick status of industries caused due to the non-availability of raw materials and provide with the necessary financial support. This will generate employment for more than 100,000 as well as generate income by way of taxes.

The chamber has also demanded for sale of byproducts of iron ore mines to be directly sold to the cement plants, pellet and beneficiation plants. "There is a need to ensure the continuous supply of raw material which is abundantly available in and around Bellary, Chitradurga and Tumkur, and make it available to the existing industries based on their capacities by granting the mining lease," Sampathraman said.

It has also stressed on the need to instruct banks and financial institutions to offer rehabilitation programme to small and medium sponge iron industries. Exports of iron ore must be stopped and only value-added steel and sponge iron exports should be encouraged, the chamber added.

Presently, the steel industry is facing an acute shortage of iron ore in the state as only 23 out of 115 mines cleared by the Supreme Court have started production. The remaining were still awaiting various approvals. The production of iron ore is estimated to touch 21-22 million tonnes during the FY15. This includes about 9 million tonnes from state-owned NMDC Ltd.

Over 30 mining leases have expired in the state and are waiting for renewal of their leases. The state government at the meeting with Tomar urged the Central government to speed up environment clearances for those mines that are waiting for renewal of their leases.

The steel industry in and around Karnataka require about 35 million tonnes of iron ore and due to the shortage of ore the capacity utilization is hovering between 60 per cent and 85 per cent. Only, JSW Steel, the largest steel mill in the state has achieved production of 85 per cent as it also imports iron ore from Chhattisgarh and Jharkhand.

However, sponge iron industries, which do not buy iron ore at the e-auctions, are facing severe problems in procuring iron ore and most of the units have shut shop. There are around 60 units in the state, while a handful of them are functioning.