Metaljunction

Faced with inordinate delay in securing statutory approvals from various state and central government departments for restarting mines, Karnataka-based iron ore miners have sought approval for enhancement of annual production of operating mines under both Category A and B. The Karnataka government and steel companies have also joined hands in this cause.

Of 115 mines in both categories, barely 25 mines have been accorded all approvals to restart mining and currently 23 mines are operating with an annual production of around 10-12 million tonnes. Besides, two more mines of state-owned NMDC Ltd are producing another nine million tonnes per annum. The current production is far below the steel industry’s requirement of 35-40 million tonnes per annum (mtpa).

Considering the delay in securing approvals by other mines, the mining industry has asked the Supreme Court to give approval to enhance their production to 30 million tonnes per annum, the ceiling fixed by the court. The court, which heard the appeal partially earlier this month, is set to hear the matter in detail on July 30.

The Indian Bureau of Mines has fixed certain capacity for each operating mine and they have to adhere to it. Since all mines have not been able to resume production, due to quota fixed for each mines total production is not even to the extent of 30 million tonnes cap and hence miners are asking for special permission from the Court to increase their existing production proportionately for mines that have resumed production so as to achieve the 30 million tonne per annum. They have also stated that their production could be reduced later to original capacity once other mines get all approvals and restart so as to achieve the cap of 30 mtpa.

On behalf of the steel industry, the Karnataka government had also filed an application in the apex court to allow existing mines to increase the production to 30 million tonnes for a temporary period of two years, so as to meet the steel industry’s raw material requirements, until other mines restart production.

“The court heard the matter partially and deferred it for further hearing. Our plea for permission to increase the production remains unresolved for the time being. The court took other important issues for discussion pertaining to forest clearances of expired leases,” said Basant Poddar, senior vice-chairman, FIMI.

The apex court, in its judgement dated April 18 last year and earlier orders has prescribed a ceiling of 25 million tonnes and five million tonnes on the total production of iron ore from all the mining leases in Bellary and Chitradurga and Tumkur, respectively. It had also approved the guidelines for preparation of the R&R (reclamation and rehabilitation) Plans, which included determination of permissible production capacity of individual leases based on several factors.

Steel industries, including sponge iron, pig iron and pellet plants, in Karnataka require an estimated 35-40 million tonnes iron ore per annum to work full capacity.

However, the production currently touched barely 20 million tonnes, including nine million tonnes, from state-owned NMDC Ltd. Taking into these factors, the state government, FIMI and Karnataka Iron and Steel Manufacturers’ Association had appealed to the apex court for enhancement of production by operating mines.

In its affidavit on February 20 this year, the Karnataka government said, “The honourable court may allow the enhancement, subject to the principle laid in determining the annual production limit from individual mines, otherwise government will have to approach in each case of fresh lease to get the annual production limit approved by the Supreme Court.”

Currently, the Central Empowered Committee (CEC) of the Supreme Court has approved R&R plans for 83 mining leases of Category-A and Category-B with a combined permissible production capacity of 17.83 million tonnes per annum in addition to two mining leases of NMDC to produce 12 mtpa of iron ore annually.

However, the monitoring committee has so far permitted only 25 million leases to start production with total permissible capacity of 10.73 mtpa. Of this, currently, only 23 mining leases are operational registering a production of 10.17 mtpa. Thus, the actual production (excluding NMDC) is only 57 per cent of the total capacity for which R&R Plans have been approved, FIMI said.

Source: Business Standard