The Supreme Court order will now allow close to 100 mines in Karnataka to restart their operations subject to certain conditions and the expectation is that normal supplies of iron ore would start in the next four to six months.
Mining firms and steelmakers in the state have been severely impacted ever since the SC imposed a complete ban on all iron ore mining activity in Karnataka in July 2011.
Basant Poddar, the Federation of Indian Mineral Industries’ southern region chairman, said: ?We are very happy that the public interest litigation has attained finality. I feel the responsible corporate mining companies have a future.? He feels that at least 30-50% of the 63 mines, whose reclamation and rehabilitation (R&R) plans have been approved by the Central Empowered Committee, would be able to start operations in a month’s time.
The order, cancelling the leases of 49 Category C mines and other stringent regulations, has raised some concerns as well. FIMI secretary-general R K Sharma noted, ?Out of a total 93 mines in A and B category of mines, only about 50-60 mines will become operational due to stringent conditions and other regulatory issues. This will eventually lead to production of about 10 MMT -16 MMT iron ore even while the demand is more than 30 MMT in Karnataka. He said that they might seek a review of the SC’s decision on the category C mines (with a high degree of illegalities).
Karnataka has been one of the major suppliers of iron ore accounting for around 30% of the country’s output. At the peak of mining activity, it used to generate around 50 MMT per annum. In fact, the annual production of iron ore in the Bellary-Hospet region of Karnataka had increased from 12.4 million metric tonnes (MMT) in FY02 to 44.39 MMT in FY09. However, the situation changed completely as rampant illegality in the sector led to the intervention of the Supreme Court which imposed a complete ban along with host of other stringent regulations.
Rahul Baldota, executive director of Bellary-based mining firm MSPL, said, ?The resumption of mining operations will help in the sector’s contribution to GDP and improve socio-economic in Bellary district in particular by boosting the employment generation.? The company had itself stopped mining operations since January 2009.
Despite the latest court order, it is not clear whether the mining industry would be able to produce adequate supply of iron ore given the demand of the steel industry. Karnataka accounts for 24% of the total steel production in India with an annual requirement of around 35 million tonnes.
?In my estimate, Karnataka would produce around 15 million tonne in FY14,? Poddar said, adding that the production could reach 20 million tonne in 2014-15 and around 30 million tonne in 2015-16. Last year, the iron-ore production of private mining companies who were allowed to start operations would have barely amounted to 2 lakh tonne,” he said.