 "Karnataka's iron ore supply to go up next financial year")
The availability of iron ore is likely to improve in the next financial year in Karnataka as another 8-10 mines on lease are set to start production. The Karnataka government recently extended the leases of eight expired ones according to the provisions of Mines and Minerals (Development and Regulation) Amendment (MMDRA) Ordinance issued on January 12.
These eight mines, once they start production, will add 2.5 million tonnes (mt) of ore to the market in Karnataka. At present, 23 mines in the private sector and two mining leases of the public sector mining major NMDC are producing around 20 mt ore annually.
Of this, 15 mines are in A-category, with a combined production of 5.05 mt, and eight in B-category, with a combined capacity of 4.65 mt per annum. NMDC produces around nine mt from two of its mines, while another two mt will come from Karnataka government-owned Mysore Minerals Limited.
He said the state government has extended leases of eight mines under Section 8A (6) of MMDRA Ordinance for a period of five years. The Section 8A (6) states that the period of lease granted before the date of commencement of the MMDRA Ordinance, 2015, where mineral is used for other than captive purpose, shall be extended and be deemed to have been extended up to a period ending March 31, 2020.
Currently, steel industries in and around Karnataka require around 35 mt ore annually, while the availability is just about 20 mt. JSW Steel, which is the largest producer of steel in the state, is importing around 10 mt ore to feed their steel plant, which requires around 18 mt annually.
“According to the provisions of the Ordinance, all mining leases, which have expired in the recent years in Karnataka are eligible for deemed extension of their leases for a period of five years. And, the auction of existing mines in both A and B categories can happen only beyond 2020 in the state,” Poddar said.
However, he said the government is free to notify fresh mining areas and allot them through the auction process. As regards to 51 mining leases in C category the state government is awaiting final approval from the Supreme Court for allotment through e-auctions, he said.
In addition to eight mines getting extension, the state government had also renewed leases of two other mines just before the promulgation of the ordinance. They are Sesa Sterlite and Sandur Manganese and Iron Ore Ltd for a period of 20 years. They have also started production and Sesa Sterlite alone has an approved capacity of 2.3 million tonnes per annum.
At present, 23 mines in the private sector and two mining leases of the public sector mining major NMDC Ltd are producing around 20 mt iron ore annually
Currently, steel industries in and around Karnataka require around 35 mt ore annually, while the availability is just about 20 mt
The state government had also renewed leases of two other mines just before the promulgation of the ordinance
These eight mines, once they start production, will add 2.5 million tonnes (mt) of ore to the market in Karnataka. At present, 23 mines in the private sector and two mining leases of the public sector mining major NMDC are producing around 20 mt ore annually.
Of this, 15 mines are in A-category, with a combined production of 5.05 mt, and eight in B-category, with a combined capacity of 4.65 mt per annum. NMDC produces around nine mt from two of its mines, while another two mt will come from Karnataka government-owned Mysore Minerals Limited.
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“There is a direction from the ministry of mines dated February 5, to all states to expedite extension of mining leases as per the Ordinance, latest by February 28. The Karnataka government has extended the leases of eight companies recently and they will start production in a month or two,” Basant Poddar, vice-president, Federation of Indian Mineral Industries, told Business Standard.
He said the state government has extended leases of eight mines under Section 8A (6) of MMDRA Ordinance for a period of five years. The Section 8A (6) states that the period of lease granted before the date of commencement of the MMDRA Ordinance, 2015, where mineral is used for other than captive purpose, shall be extended and be deemed to have been extended up to a period ending March 31, 2020.
Currently, steel industries in and around Karnataka require around 35 mt ore annually, while the availability is just about 20 mt. JSW Steel, which is the largest producer of steel in the state, is importing around 10 mt ore to feed their steel plant, which requires around 18 mt annually.
“According to the provisions of the Ordinance, all mining leases, which have expired in the recent years in Karnataka are eligible for deemed extension of their leases for a period of five years. And, the auction of existing mines in both A and B categories can happen only beyond 2020 in the state,” Poddar said.
However, he said the government is free to notify fresh mining areas and allot them through the auction process. As regards to 51 mining leases in C category the state government is awaiting final approval from the Supreme Court for allotment through e-auctions, he said.
In addition to eight mines getting extension, the state government had also renewed leases of two other mines just before the promulgation of the ordinance. They are Sesa Sterlite and Sandur Manganese and Iron Ore Ltd for a period of 20 years. They have also started production and Sesa Sterlite alone has an approved capacity of 2.3 million tonnes per annum.
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