Iron ore miners in Karnataka, the country’s richest mineral state, hope to get a breather tomorrow from the ban on iron ore which hampered mining activities in the state severely.
The petition filed by the mining major Baldota family promoted - MSPL on the state government’s jurisdiction over ban on iron ore exports is scheduled for hearing in the Supreme Court on Thursday.
The Karnataka High Court had upheld the state government’s decision on November 20. A division bench of the high court, headed by Chief Justice J S Khehar and S Abdul Nazeer earlier upheld the state government’s twin orders of July 26 and 28, prohibiting export of iron ore from 10 ports across the state and stopping issue of mineral dispatch permits for transporting iron ore meant for exports.
“The state government, irresponsibly, banned exports of mineral which is not used by steel mills in the state at all. Since, minerals like iron ore cannot be stockpiled for long due to environmental hazards, the proposed ban, if continues, will stop mining activities in the state completely,” said D V Pichamuthu, director, Federation of Indian Mineral Industries (Fimi), South. “We are confident of getting a relief from the apex court.”
Meanwhile, nearly 40 miners in the state with an overall capacity of 38-40 million tonnes have halted mining of iron ore completely. Barring the state-owned Mysore Minerals Ltd (MML) which signed a long-term agreement with Jindal Steel for iron ore supply, no other mining unit is operational. Some small mines operating with 15-20 per cent of their annual capacity, supply the steelmaking raw material to small steel mills like the one Kalyani Steels.
A MSPL official said that local steel mills are not buying iron ore from state miners due to logistics issues. Transportation system worsened in the state resulting into huge stockpiling of iron ore.
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A separate petition filed on the same by Vedanta Resources - controlled Sesa Goa will come for hearing later.
The major aim for the government is to stop illegal mining in the state which contributes significantly to the overall mineral production. But, by ban on iron ore, the state has curbed legal mining also, said R K Sharma, secretary general of Fimi.
The state government, however, had assured the government to come out with a proper system to curb illegal mining within six months expiring January 20, 2011. Miners are awaiting the state government’s formal system which may re-open exports and thereupon, mining activities also.
Meanwhile, rising iron ore prices have also irked miners in the state. Prices of imported iron ore with 63.5 per cent iron content in China, India’s leading buyer of steelmaking raw material, surged to $175 a tonne on Wednesday, the highest since May this year. The contract for delivery in January, cleared by the Singapore Exchange, rose $1.62 to $172.12 a tonne and the February contract climbed $1.38 to $171 a tonne.
China maintained imports equivalent to its 70 per cent of annual consumption from Brazil and Australia. India supplies nearly 15 per cent. But, the country has also increased domestic production to reduce dependence on imported iron ore. Now, Brazil and Australia contribute 60 per cent of China’s overall iron ore consumption of nearly 750 million tonnes.