SC allows mining in Karnataka, with riders

The Supreme Court on Friday accepted the recommendations of the Central Empowered Committee (CEC) to start iron ore mining in Karnataka, giving the ore-starved steel industry a shot in the arm.

The apex court has given ‘in principle’ approval to 45 mines listed under category ‘A’ by CEC in its March report and some category ‘B’ mines owned by NMDC to restart mining activities and sell through the e-auction route.

However, the apex court has put some conditions: for mining to resume, the reclamation and rehabilitation (R&R) work in these mines needs to start immediately.

CEC will come up with a plan to implement the R&R scheme next week and the mines will be restarted subject to its approval by the Supreme Court.

Steel producers have hailed the move, but said it could take months for the supply situation of iron ore to ease.

“There are around 45 mines in the state under Category-A and it will take a lot of time for all the mines to restart. I think we will see five mines coming on stream per month starting from May,” said V Nowal, chief executive officer, JSW Steel.

JSW is the biggest consumer of iron ore in the state and currently runs a 10 million tonne per annum steel plant at Vijayanagar in Bellary.

The Supreme Court has capped iron ore production from the most prolific iron ore region — Bellary — at 25 million tonne per annum (mtpa) and from the remaining mines in Chitradurga and Tumkur districts at 5 mtpa.

Nowal conceded that the Supreme Court order was a breather, though it comes a little late in the day. According to him, the iron ore available in the state for e-auction would not have lasted more than two months.

A top steel ministry official, too, said it was a positive development, but added that “several NMDC mines are already operating in the region, so I don’t think it will have much impact on the company’s production.”

But RK Goyal, managing director, Kalyani Steel begged to differ. “NMDC is not able to produce more than 0.5 mt per month out of the total allowed production of 1 mt, so this order will at least help in replenishing the depleting iron ore reserves (available for sale through e-auction).”

He, however, said it was unlikely any of the mines will come on stream in the next four months, which means the companies will continue to be at the mercy of NMDC whose e-auction stock has reduced to low-quality fines.