After a three-year gap, the Karnataka government has initiated the process to recommend new iron ore mining leases, a move that could speed up the launch of large steel projects by ArcelorMittal and Tata Metaliks in the state.
?We have started the process by surveying land in Bellary and studying availability of iron ore deposits,? MN Vidyashankar, principal secretary, department of industries & commerce, Karnataka, told FE. The state government will have to forward lease recommendations for various parties to the Centre, which is the final ratifying authority.
Global giants like ArcelorMittal and South Korea?s Posco want guaranteed mining leases to start work on six million tonnes per annum steel plants in Karnataka. Both have committed investments of around R30,000 crore each.
Karnataka stopped issuing mining leases around three years ago after illegal mining in Bellary came to light, which led to a Supreme Court ban on all mining activity in the state in July 2011. Only recently did it allow a few firms to restart operations.
The government has already got requests for mining leases from ArcelorMittal and Posco, besides Indian players like JSW, Tatas, NMDC and KIOCL. An earlier move to recommend mining leases had to be suspended after court directives.
ArcelorMittal, which is in the process of acquiring land for its Bellary plant, had earlier received a mining lease that the company rejected, citing ore quality issues. Posco too has insisted on getting leases before starting work.
In order to encourage steel plants and weed out non-serious bidders, Karnataka has said that priority would be given to those who engage in value-addition like making steel. Karnataka has around 166 iron ore leases in Bellary, Chitradurga and Tumkur districts, with most operators engaged only in mining and trading.
With the Supreme Court guidelines on mining, many smaller players are expected to be forced out.
Vidyashankar said the state government is on track in facilitating establishment of mega steel plants. He said ArcelorMittal has already acquired close to 70% of the total 4,000 acres of required land while Tata Metaliks already has around 2,000 acres. However, Posco’s plans have not progressed due to opposition from farmers.
Making a beeline
* Move could speed up launch of large steel projects by ArcelorMittal and Tata Metaliks in Karnataka
* With investments of R30k cr each, ArcelorMittal & Posco want guaranteed leases to start work on 6 mtpa plants
* Besides ArcelorMittal and Posco, govt also has lease requests from Indian players like JSW, Tatas, NMDC & KIOCL