There were divided opinions within the steel and mining sectors on the Supreme Court’s decision to lift the ban on 84 mines in Karnataka, though the apex mining body Federation of Indian Mineral Industries (FIMI) said that iron ore availability would only be partial as complying with regulatory norms would be tough ask for the industry.
Reacting to the decision by the Apex Court, FIMI said that even after the SC permission to operate all Category-A and B mines, iron ore availability will ease only to a limited extend as compliance of regulatory norms will not be easy and only 10 million tonnes will be available in immediate future.
However, steel industry termed the judgement as a breather and said supplies of iron ore and its quality will improve, while prices will go down. They expressed hope that about 24 million tonnes of iron ore, which is required for making steel, will be available in the market.
The Supreme Court, in its order on Thursday, permitted mining in Category-A and B mines, but cancelled 49 leases in Category-C mines, where maximum illegalities were reported.
After this, 84 mines, falling in Category - A and B, will be available for mining. All these mines are located in Bellary, Tumkur and Chitradurga districts of Karnataka.
The court also accepted most of the Central Empowered Committee’s recommendations for resuming mining in the state.
FIMI’s Secretary General RK Sharma said that only about 50-60 mines will get operational due to stringent conditions and other regulatory issues.
“It will lead to production of around 10 MT iron ore only,” he said adding that most of the mine owners will find it difficult to meet the reclamation and rehabilitation (R&R) conditions or will not be able operate at reduced capacities as it will be economically unviable for them.
Kalyani Steel’s Managing Director R K Goyal said that “it will take upto 2 years to all these mines to open. Quantities have been curtailed and not more than 24 million tonnes (MT) is going to be available.”
Noting that 24 MT is not enough to meet the industry’s requirement in Karnataka, he said that “whatever is being available is welcome. It will ease iron ore supply situation.”
JSW Steel’s Joint MD and CFO Seshagiri Rao said, “this relief not only provides breather to steel industry in the region but also assists in providing of direct and indirect employment and livelihood for several people...”
JSW Steel is the largest steel producer in the state with a 10 MT in a year capacity.
Sesa Goa, which got the permission to operate as its mine was in category B, said the court judgement would be helpful in restarting the economic activities in the region.