Supreme Court To Allow Partial Iron Ore Mining In Karnataka

The iron and steel industry in Karnataka has been delivered some respite from the Supreme Court after being allowed to carry out partial mining in the region. The decision has come after a long waiting period when the Supreme Court banned all types of mining activity in August 2011 citing environmental violations and asked the Centre to carry out an environmental impact assessment. The decision has come at a time when the steel and iron producing companies were feeling the heat due to a shortage of iron ore in the region.

Earlier, after the mining ban was imposed, the Supreme Court directed NMDC to produce 1 million tonne of iron ore in the region to fulfill the requirement while it also allowed the steel manufacturers to utilise the 25 million tonnes of iron ore stock piles. Karnataka produces about 16 MT steel in a year, amounting to more than 20 per cent of the country’s total output. The input output ratio of iron ore to steel is 1.7-2. The ratio changes depending on the quality of iron ore.

Higher the quality, lower the requirement, and vice-versa. This means that for producing 1 tonne of steel, 1.7-2 tonnes of iron ore are required. Therefore the requirement is huge in the region. However, due to logistic and production issues, NMDC was able to supply only half of the ordered iron ore. Left with no choice, companies like JSW Steel reduced its steel production from 89 per cent capacity utilisation to a level of 60-65 per cent. Also, the 25 million tonnes of stock piles were on the verge of extinction and the only hope for the steel companies was to get a green signal from the Supreme Court.    

As per the media reports, the Supreme Court has allowed mining to restart in the iron ore mines of more than 50 hectares in Karnataka after their environmental plans are approved but with certain conditions, including putting into place the reclamation and rehabilitation (R&R) plan. The final judgment on the issue is yet to be delivered. This means that the owners of the mines have to file an R&R plan which will take some more time and cause further delay in resuming the mining activities in the region.

In a press statement, the spokesperson of the Federation of Indian Mineral Industries said that mining in the region may begin within the next two weeks. This will provide relief to companies like JSW Steel, Essar Steel and Sesa Goa who were some of the major victims of the mining ban.