The Centre on Tuesday moved the Supreme Court seeking a direction to Karnataka to expedite the process of opening up mines in A & B categories in a time-bound manner and on a priority basis in the interests of the steel sector, which is dependent on iron ore from the state.
As FE reported recently, seven months after the SC lifted the ban on iron ore mining for the majority of lease areas, production from the mines continues to crawl due to the state government?s failure to give clearances.
Of 115 mines (categories A and B) that are eligible to start operations after the SC?s April verdict, only 15 have commenced operations so far and their production up to the end of October has been around 6 million tonne (mt). Annual production from these 115 mines stood at 35 mt in 2009-10, the year before the illegal-mining scam erupted, leading to imposition of the ban in July 2011.
To ensure that the steel industry in Karnataka gets iron ore as directed by the apex court, the Centre also wants a direction to the state government to complete the process of auction of Category C mines in a time-bound manner, which otherwise may take more than two yea-rs to become operational. The earlier licences for category C mines were cancelled and these are to be re-allocated.
Finance minister P Chidambaram has recently said the government would move the SC seeking relaxation in some of its orders on iron ore. He indicated that if need be, the government will look at reducing the 30% export duty to make Indian ore competitive in markets such as China.
Subject to fulfillment of all statutory obligations, the steel ministry has also requested SC to increase permissible mining limit to 50 mt per annum from the present 30 mt in view of the existing iron and steel plant capacity and imminent expansion in the near future. According to it, the functional A and B category mines won?t be able to produce more than 23 mt of iron ore even by 2015, as against the present requirement of more than 40 mt of iron ore.
?In view of this exigency, the applicant prays for relaxation of the limits of permissible mining production of a few of the presently functional mines of category A and B within the overall prescribed legal framework. This will ensure availability of iron ore to strained iron and steel industry till the time other mines in category A,B and C start production. As and when new mines of category A, B and C come in to production, this relaxation could be proportionally reduced to ensure that the production limit of 30 mt set by the apex court is maintained for the state,? the government stated in an affidavit filed on Tuesday.