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Fourteen months after the Supreme Court allowed mining in all categories of iron ore mines in Karnataka, production is slowly gathering pace. As regulatory bodies are moving slowly in granting approvals, so far, only 23 mines have restarted operations, with combined annual production of 21-22 million tonnes (mt).
The mining sector expects the state government to execute five-six pending leases, which can add two mt to capacity. The state government has appealed to the Supreme Court to increase the cap on production from 30 mt to 40 mt. In its order dated April 18, 2013, the apex court had allowed recommencement of mining in all 115 mines under categories A and B, subject to regulatory approvals. Two leases under state-owned NMDC were allowed to continue mining since August 2011, producing 12 mt a year.
According to Federation of Indian Mineral Industries (Fimi), which has been assisting the Indian Council of Forestry Research and Education in reclamation and rehabilitation (R&R), so far, 91 mines have secured approvals for their R&R plans. Of these, only 23 have restarted operations, while the rest are awaiting regulatory approvals.
An additional seven mines are located on the inter-state boundary between Karnataka and Andhra Pradesh, where the apex court hasn’t allowed mining. In the case of a dozen other mines, whose capacities are extremely low, the state government has issued notices, asking them whether their leases can be terminated.
“We expect production of iron ore, which stood at 19.1 mt in 2013-14, to rise to at least 21-22 mt in 2014-15. About four mines are ready to start operations and four more are awaiting approvals. If they secure approvals and start mining later this year, production could even stand at 25 mt,” said Khyum Ali, director, Fimi.
While steel plants in and around Karnataka need an estimated 35 mt of iron ore a year, capacity utilisation stands at 60-85 per cent. A total of 51 mining leases are awaiting renewal of leases, which are struck at various levels in the state government and the Union environment ministry. Together, these mines could add another six-seven mt a year.
“We have to resolve some issues before allowing the mines to restart. For some mines, the mining areas, earlier in revenue land, have now been classified under forest area. These have to get forest clearances. Until we resolve these issues, they cannot start production,” said Tushar Girinath, secretary in the department of mines and geology, government of Karnataka. He added production could be increased by another eight mt if some mines awaiting forest and environment clearances managed to secure these nods.
Meanwhile, the state government has also started issuing fresh mining leases. “In 2008-09, the state government had sanctioned approvals for five-six applications for new leases. These applicants have secured all approvals, including that of the environment ministry. But the lease deeds weren’t executed. We are eagerly waiting for the government to execute these deeds,” said Basant Poddar, managing director, Mineral Enterprises Ltd. He added if approved, the new leases could add two mt a year to production. Though their original capacity was about five mt, after the cap of 30 mt, capacity would fall, Poddar said.
With the recommencement of mining, about 15,000 people have been re-employed directly, while an additional 100,000 indirect jobs have been created. Revenue to the state government by way of royalty, forest development tax and value-added tax has been about Rs 1,400 crore a year.
The iron ore sold through e-auctions stands at 71 mt, valued at about Rs 17,236 crore.
