"This relief not only provides breather to the steel industry in the region but also assists in providing of direct and indirect employment as well as livelihood for several people employed in the sector at a time when the steel industry was at the brink of closure due to non-availability of iron ore," company's Joint MD and Group CFO Seshagiri Rao said.
The Supreme Court today while cancelling all 49 mining leases in category C mines in Bellary, Tumkur and Chitradurga districts of Karnataka, allowed resumption of activity in category A and B mines as recommended by a Central Empowered Committee (CEC).
Welcoming the apex court judgement, he said it will open up the remaining category A and B mines in Karnataka and will have a positive impact on the steel sector and the economy.
"As Indian economy is expected to get back to growth mode, the opening up of mining will enable raw material linkages for further investments in steel sector in Karnataka region," Rao added.
The three categories -- A, B and C -- were formed by the CEC depending upon their conditions. The mines where least irregularities were found were put in Category-A, while the ones with most irregularities were put in Category-C.
Till now, mining operations in Karnataka, barring a few, were closed due to a ban imposed by the Supreme Court during July-August, 2011. This was due to environmental degradation in the concerned areas and iron ore -- the vital raw material in steel making -- was sold only through the auction.
Last year, the court had given partial relief to the industry and had allowed Category-A mines to operate. However, only 7-8 mines have become operational till date.
The mining ban in the state had led to severe shortages of iron ore for the iron and steel producers in Karnataka, including JSW Steel -- the largest producer in the region with a 10 million tonnes per annum production capacity.
Due to iron ore crisis, JSW Steel had operated its Karnataka plant at 80 per cent capacity in the last fiscal and had produced 8.51 million tonnes of steel.
JSW shares were being traded at Rs 715.50 apiece on the BSE during the afternoon trade, down 2.37 per cent from the previous close. PTI AMA NAM STS tvs DKR 04181403