Many a major steel mill in Karnataka are facing closure due to a severe shortage of iron ore, threatening the very livelihood of thousands of families.
“The impact of the present crisis stemming from a ban on several iron ore mines in the Bellary-Hospet region is likely to spread fast to smaller units and also leave thousands of workers jobless,” said the Associated Chambers of Commerce and Industry of India (Assocham).
On May 6, the Supreme Court asked a team of officials to conduct a joint survey of mining lease areas mentioned in the Lokayukta report. If the joint team concludes that there has been illegal mining in encroached areas, then the lessee will immediately stop all mining operations in the entire demarcated area, the chamber said in a statement.
“The Supreme Court has not given any direction to completely stop all mining activity in the district,” said Assocham’s secretary general D S Rawat in a letter to chief minister B S Yeddyurappa and chairman of the Central Empowered Committee (CEC) P V Jayakrishnan.
“In fact the apex court has asked to assess the encroachment in a scientific manner without effecting the present operations.” But officials at the Department of Mining and Geology at Hospet have issued closure notices to all mines in the district, severely affecting the functioning of the steel industry, the release said.
The mines in Karnataka supply iron ore to several large steel plants like JSW, Kirloskar Ferrous, Mukand Ltd and Kalyani Steels. The state also supplies raw material to dozens of small and medium-sized sponge iron units in Maharashtra, Gujarat, Andhra Pradesh and Tamil Nadu.
Steel, iron and other industries have invested about Rs 70,000 crore in the landlocked Bellary-Hospet region as it has abundant availability of iron ore. “The state finances will be adversely affected as these industries pay excise duty, royalty and value added tax to the tune of Rs 8,000 crore a year,” Rawat said.
Mining should be moved from the unorganised sector to organised if it is to be done in a legal, scientific and environment-friendly manner, said Assocham. Karnataka accounts for 15 million tonnes of steel production representing 25 per cent of the country’s output.
Keeping in view the huge investments, employment of thousands of workers, social responsibilities and dependency of industries on iron ore, the chamber has asked the CEC to ensure uninterrupted availability of iron ore lumps and fines to meet industrial requirements while complying with the Supreme Court order, he added.
