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Fourteen months after the Supreme Court allowed mining in all categories of iron ore mines in Karnataka, the production is slowly gathering pace.
As regulatory bodies are moving very slow in giving approvals, till now only 23 mines have restarted operations with a combined annual production of 21-22 million tonnes.
Industry is also expecting state government to execute pending 5-6 leases which can add 2 million tones. The state government has also appealed to the Supreme Court to increase the cap on production from 30 million tonnes to 40 million tonnes, he added.
The Apex Court, in its order dated April 18, 2013, allowed recommencement of mining by all 115 Category A and B mines subject to regulatory approvals. The court has capped the production at 30 million tonnes per annum. However, two leases of state-owned NMDC Ltd were permitted to continue mining since August 2011 and produce 12 million tonnes per annum.
According to Federation of Indian Mineral Industries (FIMI), which has been assisting the Indian Council of Forestry Research and Education (ICFRE) in preparing the reclamation and rehabilitation (R&R) Plans, till now, 91 mines have secured approval for their R&R Plans. Of these, only 23 mines have restarted operations and the balance mines are still awaiting regulatory approvals.
Another 7 mines are located on the inter-state boundary between Karnataka and Andhra Pradesh, where the Apex Court has not permitted mining. A dozen other mines, whose capacities are so low that they are not interested to remain in the business. The government of Karnataka has issued notices to them asking if their leases can be terminated.
“We expect the production of iron ore, which stood at 19.1 million tonnes in 2013-14, to go up to at least 21-22 million tonnes in 2014-15. About four mines are ready to start their operations any time and four more mines are waiting for approvals. If they get approval and start mining later this year, the production could even go up to 25 million tonnes,” said Khyum Ali, Director, FIMI.
The steel industries in and around Karnataka require an estimated 35 million tonnes of iron ore annually, while the current capacity utilization is hovering between 60% and 85%.
About 51 mining leases are awaiting renewal of their leases, which are struck at various levels in the government of Karnataka and ministry of environment and forests (MoEF). These mines together could add another 6-7 million tonnes per annum.
“There are some issues we need to sort out before allowing the mines to restart. The mining areas of some mines, which were earlier in the revenue land, have now been classified under the forest area. They have to get the forest clearance. Until we sort out these issues, they cannot start production,” said Tushar Girinath, Secretary, Department of Mines and Geology, government of Karnataka.
He said the production could be increased by another 8 million tonnes, if some mines that are waiting for forest and environment clearance get the clearance. There are many other mines that are waiting for renewal of leases. The state government has also appealed to the Supreme Court to increase the cap on production from 30 million tonnes to 40 million tonnes, he added.
Meanwhile, the state government has also started the process of issuing fresh mining leases. “The state government had sanctioned approval for 5-6 applications for new leases in 2008-09. These applicants have got all the approvals including MoEF. But, the lease deeds were not executed. We are eagerly waiting for the government to execute the lease deeds,” said Basant Poddar, managing director, Mineral Enterprises Ltd.
He said if approved, the new leases could add another 2 million tonnes per annum. Their original capacity was about five million tonnes. But, now considering the cap of 30 million tonnes, their capacities could be reduced, he said.
With the recommencement of mining, about 15,000 persons have been re-employed directly and another 100,000 indirect jobs have been created.
The revenue to state government by way of royalty, forest development tax and value added tax has been in the order of Rs 1,400 crore annually. The total iron ore sold through e-auctions has touched 71 million tonnes valued at over Rs 17,236 crore.
