Steel ministry undertaking KIOCL, which has been facing acute shortage of iron ore for the last decade, is all set to secure captive mines in Karnataka. After a prolonged delay over the allotment of mines, the state government has almost finalised the allotment of a new iron ore lease to the company in Ballari district.
The state government has indicated that around 394 hectares of mining area has been identified for allotment to KIOCL in the Devadaru mining region in Sandur taluk of Ballari district. Following the state’s directions, the company has carried out an initial survey in the area and has submitted a detailed application, government sources said.
Recently, the Standing Committee on Coal and Steel set up by the Parliament had made a strong recommendation to the government to allot captive mines to KIOCL.
KIOCL has been sourcing raw material from NMDC’s Chhattisgarh mines for its pellet plant at Mangaluru for the last ten years ever since it shut down its own captive mines at Kudremukh in Western Ghats area of Chikkamagaluru district in 2006 following a direction from the Supreme Court.
Since then, KIOCL has been looking for iron ore deposits in Karnataka to ensure supply of raw material to its 3.5 million tonne per annum pellet plant in Mangaluru. Due to non-captive source of iron ore, KIOCL is unable to meet iron ore requirement of pellet plant and its operation has become an unviable proposition.
The 100% export-oriented unit was not allowed to source iron ore in its home state of Karnataka as exports from the state were banned. Though the company had made several applications to the mines and geology department of Karnataka, mines were not allotted to the company for various reasons.
However, the recently amended Mines and Minerals (Development and Regulation) Act, 2015 provides for reservation of mining assets to public sector companies. Under Section 17 a 2(A) of MMDR Amendment Act 2015, KIOCL had made a fresh application to the Karnataka government for allotment of captive mines.
“Under the provisions of Section 17 a 2 (A) of MMDR Amendment Act we have made a fresh application to the state government to provide us mines so as to sustain our pellet plant,” KIOCL chairman and managing director Malay Chatterjee had said recently.
The Mines and Geology Department officials in Karnataka have confirmed the development. “It has been decided to give mining lease to KIOCL. We have identified a block in Sandur taluk of Ballari district and told the company to conduct its and file a detailed application with findings. The allotment will be made as per the new MMDR Act,” a top official told FE.
According to government sources, KIOCL will be allotted new mining lease in Devadaru region in Ballari district. The company had initially sought mining lease in Ramanadurga region, which has rich reserves of iron ore.