Steel and pig iron companies that depend on iron ore from Karnataka are facing closure due to a severe shortage of the mineral. The state’s steel industry, whose 21-million-tonne (mt) output accounts for 25 per cent of the national production, is operating with just a 45-day supply of iron ore.
“If mining does not resume in the state immediately, it would be very difficult for us to keep the plant running,” said Vinod Nowal, director and chief executive officer, JSW Steel.
The Supreme Court banned all iron ore mining in the districts of Bellary, Chitradurga and Tumkur in July last year. It has allowed auction of about 25 mt of iron ore since September to help the steel industry tide over the crisis.
Talking to Business Standard on the sidelines of a conference on manufacturing organised by Assocham here today, Nowal said JSW Steel had made an appeal to the government to facilitate resumption by Category A mines, which had been cleared by the Supreme Court-appointed Central Empowered Committee (CEC).
CEC has till now accepted the reclamation and rehabilitation (R&R) plans of about a dozen companies and cleared these to restart mining, subject to conditions. It is estimated these companies would bring to the market about five mt of iron ore per annum once they resume mining.
JSW, the largest producer of steel in Karnataka, is fast running out of iron ore, the key raw material, at its 11-mt per annum Toranagallu steel plant in Bellary district. It requires about 60,000 tonnes of ore per day to run its plant. JSW has purchased about 14 mt of iron ore sold at the e-auctions in Karnataka since September 2011 and taken delivery of 11 mt. Earlier, delivering a theme address at the conference, Nowal said the mining sector needs political help to start exploring, by taking care of the environment as well as social aspects.
“As this sector has consistently reported negative growth over the past few cycles and is one of the routes to put India on the path of growth, the government should play the role of a facilitator to speed up things,” he said.
M N Vidyashankar, principal secretary, department of commerce & industries, government of Karnataka, said the mining industry could expect some positive news by the end of August. “Chief Secretary S V Ranganath has held a meeting with secretaries of the department of mines and geology and other officers to facilitate the resumption of mining in the state. The industry can expect some good news by the end of August,” he said.
