SC order on reopening Karnataka mines brings relief

Iron and steel firms in Karnataka are relieved over the Supreme Court order to allow reopening of mines in A & B categories as they will get more iron ore to increase their production.

Though the apex court Thursday cancelled leases of 49 firms in C category mines for extracting iron ore in Bellary, Chitradurga and Tumkur districts in the state, mining firms in the top two categories will be able to resume operations after they secure regulatory approvals, as leases of many firms like Sesa Goa and MEl have expired.

With the exit of 49 firms in C category, 117 firms in A & B categories will be able to resume mining though only after they renew leases and secure statutory approvals, which are time-consuming, according to the Federation of Indian Mineral Industries (FIMI) here.

"There are many small firms which will not be able to resume mining with less capacity fixed by the apex court-appointed Central Empowered Committee (CEC). Moreover, many firms in A & B categories have to submit reclamation and rehabilitation (R&R) plans to the CEC as mandated by the top court for regulatory approvals," FIMI secretary-general R.K. Sharma told IANS here.

Till date, the CEC has approved R&R plans for 57 mining leases, including 25 in category B with annual combined capacity to extract 7.34 million tonnes of iron ore and 20 leases in category A with annual combined capacity of 2.5 million tonnes.

"With eight mining firms in both categories resuming production after securing approvals from CEC and state authorities with a combined capacity of 2.5 million tonnes, the total production will be about 15 million tonnes this fiscal (2013-14), with the remaining production coming from the state-run National Mineral Development Corporation (NMDC)," Sharma pointed out.Though the apex court allowed NMDC to produce one million tonnes per month, it is able to extract only about 70,000 tonnes. 

Mining firms such as Sesa Gao, MSPl, MMl, MEl and SKME are classified in B category. Sesa Goa has CEC approval to mine 2.29 million tonnes a year, while MEl has approval to mine about 420,000 annually.

"We are very happy with the apex court judgment, as it will normalise our mining operations. The uncertainty is over for us. We hope to get 20-21 million tonnes of iron ore by this year-end, which will enable us to achieve about 90 percent production capacity utilisation," JSW chief executive Vinod Nowal said in a statement from Torangallu in Bellary district, about 330 km from here.

Other steel majors such as Kalyani Steel and BMM Ispat will also be able to increase their production to over 80 percent from the current 50 percent with additional iron ore from mining firms in A & B categories.

"The judgment is a step in the right direction and is a good development for the country. It is a big relief for us and will help improve the socio-economic conditions in Bellary district," MSPl executive director Rachel N. Ballot said in a statement.

According to Mineral Enterprises ltd. managing director Basant Poddar, the apex court order will pave the way for the mining sector in the state to enhance production to 25 million tonnes from next fiscal (2014-15) and to 30 million tonnes in 2015-16 as all mining firms will be able to extract the raw material with their R&R plans in place for regulatory approvals.

"Though the apex court ruling is a great relief for the mining sector, resuming operations all over again after a gap of nearly three years is time-consuming, as the regulatory process is slow in our country. In addition, all mining firms have to get their R&R plans approved by the CEC and secure other mandatory clearance as laid down by the court," FIMI director-general R.K. Bansal said.