CEC suggests cap on iron ore mining in Karnataka

In what may hit steel and mining companies in Karnataka, the Central Empowered Committee (CEC) in its report to the Supreme Court has recommended that the iron ore mining in Bellary district should be capped at 25 million tonne (mt), whereas for other districts Chitradurga and Tumkur, a ceiling of 5 mt should be imposed.

It has suggested that no new mining leases for iron ore should be sanctioned in these districts till the process of reclamation and rehabilitation is completed and common facilities for transportation of minerals have been put in place to justify any increase in the ceiling on iron ore production. ?No mining leases should be sanctioned only for the purpose of trading,? CEC said in its report.

If the Supreme Court imposes cap on iron ore production, the expansion plans of many steel companies including JSW, ArcelorMittal, Posco and Bhushan Steel would be in for a trouble. Most of these companies have already applied for a new mining lease in the state.

?For companies like ArcelorMittal and Posco, the state government has already committed the mines. Also, a ceiling of 30 mt would restrict the growing demand for iron ore for steel manufacturing units,? RK Sharma of Federation of Mines and Minerals, said.

The Supreme Court had appointed CEC last year to look into illegal mining in the state. The committee submitted its report to the Court on Friday.

The panel has classified mining leases in Karnataka into three categories ? A, B and C. Category A comprises of 21 mines where no illegality or marginal illegality have been reported and 24 non-working mines. There are 72 mines that have been involved into illegal mining through mining up to ore than sanctioned areas. Such mines are part of category B.

The third category C comprises of mining leases that produced more than 10% over the mining area and have been violating Forest Conservation Act. There are 49 such cases and the committee has recommended that the licenses for these mines should be cancelled.

?After cancellation, the mining leases may be directed to be allotted/assigned through a transparent process of bidding to the highest bidder from the end users,? the panel suggested.