In a new blow to the Rs 1.5-lakh crore iron ore mining industry in Karnataka, the state government has issued a direction to halt all kind of iron ore mining activities in the Bellary-Hospet region for a temporary period. Many steel mills in the region face severe shortage of ore.
The department of mines and geology (DMG) issued a notification to all mining lease holders on May 13, to shut down all kinds of mining activities, including transportation of mined material, crippling the supply of raw material to steel industries in the region. The action of the DMG came in the wake of the fresh joint survey of 99 mining leases in the district as ordered by the Supreme Court (SC) on May 6.
Steel mills in Karnataka require 70,000 tonnes of iron ore for their production daily. Karnataka is the third-largest producer of ore and accounts for one-third of India's exports.
Earlier, the apex court had directed for constituting a tripartite committee from an SC panel, DMG and Lokayukta officials to conduct a survey to demarcate the boundaries and assess the extent of encroachments.
The team commenced its work from May 16. The DMG, to facilitate the smooth conduct of the fresh survey, has issued orders to mining leaseholders to stop all kinds of mining activities and transportation of ore with immediate effect. It has also asked them to surrender all the mineral dispatch permits and relevant trip sheets until completion of the survey.
“The fresh move of the Department of Mines is a setback. Already, they have been suffering heavy losses due to the absence of exports for the last ten months. This move would not only overburden miners, but also affect domestic steel companies,” a miner in the state said.
When contacted, D V Pichamuthu, director, Federation of Indian Mineral Industries, South, said, “It is very difficult to understand the logic of the mines department. We have been fighting for the last 10 months for restarting exports. Even after the SC directions in favour of the miners, the state government has not started issuing export permits."
In its order, the SC had not given any direction to completely stop all mining activities in the district. It had asked to assess the encroachment in a scientific manner without affecting the current operations. The sudden action of the Department in issuing closure notices to all the mines in the district have severely affected the functioning of the steel industry, said industry sources.
“We are closely watching the situation. All these days, only the mining companies have suffered and the recent move of the state government has hit the steel companies. Let the steel industry take up the issue with the government now," Pichamuthu said.
Six big steel companies, including JSW, Bhushan Steel, are contemplating a move to approaching the SC against the state government order.
JSW Steel, Kirloskar Ferrous, Kalyani Steels, Visveswaraya Iron & Steel, among others, have set up plants in Karnataka with huge capital investments. Karnataka is also a major supplier of iron ore to mills in Maharashtra, Andhra Pradesh, and Tamil Nadu, especially to medium and small size sponge iron units. Out of the total annual production of 60 million tonnes of steel in India, Karnataka contributes to 25 per cent.
