Steel makers, including global steel giants ArcelorMittal and Posco, are expected to slow down the pace of their projects in Karnataka as the ministry of environment and forests (MoEF) has decided not to clear any proposals in the state till the mining ban is lifted.
According to sources in Karnataka Udyog Mitra, the single window agency responsible for promoting industries in the state, the iron and steel companies that signed MoUs in the Global Investors Meet (GIM) in 2010 have started expressing their concerns to the government as they doubt whether they will get new mining licenses to set up their steel plants.
Talking to FE, Basant Poddar, managing director of Mineral Enterprises (MEL), said the company had proposed to set up a pellet plant in Hassan district with an investment of around R2,000 crore. At present, he said the land acquisition is going on and that he has applied for environmental clearance. ?With the mining ban in Karnataka, we don?t know how it would be possible to implement the project,? he said. MEL is not depending on any new mining lease as it already owns an iron ore mining lease in Chitradurga district with a capacity to produce iron ore of 3 million tonnes per annum (mtpa).
Companies with existing mining leases are hesitating to proceed with their projects and so firms depending on new mining leases are expected to slow down implementation of new projects. In an order issued on September 20, the MoEF had said that in keeping with the SC order of mining ban in three districts of Karnataka, all mining projects which are ?pending environmental clearance and are at different stages of processing? with the ministry or State Environment Impact Assessment Authority will be ?delisted?.
At present, ArcelorMittal and Posco, the two major companies which are committed to invest R30,000 crore and R32,000 crore respectively to set up 6-mtpa integrated steel plant each, are in the process of acquiring land. Both have applied for mining leases, but it may not be granted immediately as the MoEF has decided not to clear any mining projects till the mining ban is lifted in three districts of iron ore rich Bellary, Tumkur and Chitradurga.
According to sources, there are 11 mining projects awaiting environment clearance in the state. In the case of JSW Steel the government has cleared the company?s proposal to invest another R15,131 crore to increase its installed capacity to 16 mtpa at its existing plant in Bellary. But if the mining ban is not lifted and mining lease is not provided, it would not be possible to expand the capacity from the current level, an official attached to JSW said requesting anonymity.
A report by brokerage firm Prabhudas Lilladher says that JSW requires around 40,000 tonnes of iron ore per day to run its plant. As the company is not owning any mining leases, it is procuring raw material from the outsiders including the government-owned National Mineral Development Corporation (NMDC).
To overcome the crisis, chief minister Sadanada Gowda has asked the Industries Department to conduct a meeting next week to appraise the status and future of new steel industries in the state, state government officials said.
