Iron Ore Starved Steel Industry Around Karnataka Might Have to Wait for a Longer Period

Business Standard reported that iron ore starved steel industry in and around Karnataka might have to wait for a longer period to get smooth supply of key raw material for its blast furnaces as the opening of Category B mines, which contain larger deposits, is getting delayed.

The delay is due to non fulfillment of certain conditions imposed on these mines by the Supreme Court.

Industry sources said that the court is likely to hear the appeal for opening of Category B mines at the next hearing on January 8th 2013.

The Supreme Court appointed Central Empowered Committee has approved the reclamation and rehabilitation Plans of 23 mines under Category B in Karnataka. These mines, which can together produce over six million tonnes of iron ore per annum, are presently awaiting the apex court's nod to resume mining.

Opening of Category B mines is very vital for the steel industry in Karnataka, as the annual permissible production expected from these mines is relatively larger. Currently, the industry is dependent on only four mines in Category A that have started mining and produce close to 2 million tonnes per annum besides 12 million tonnes from National Mineral Development Corporation. There are 63 mines under Category B.

SC's permission to these mines is delayed, as these mines are yet to submit an undertaking to pay additional amount as penalty for violating mining norms.

The apex court, in its order dated September 28th 2012 directed that before considering resumption of mining operations in Category B, these mines should pay a compensation of INR 1 crore per hectare for the areas under illegal overburden dumps roads, among others, outside the sanctioned lease area and INR 5 crore per hectare for illegal mining pits outside the sanctioned area.

Each lease holder besides making payment as directed above must also give an undertaking to CEC for payment of additional amount, if held liable on the basis of final determination.

The SC directed constitution of a committee to determine the amount of compensatory payment to be made by each of the leaseholders with regard to the value of ore, illegally extracted from forest and non forest land, falling within or outside the lease area and the profit made from such illegal extraction and the resultant damage caused to the environment and the ecology of the area.

The SC in its order said that the committee would decide the guarantee money for implementation of the R&R plan in the respective sanctioned lease areas.