CEC To Provide Details For Resumption In ‘B’ Category Mines

Almost a month after lifting the Ban on mining activities in Karnataka, the Supreme Court has now asked the Central Empowered Committee (CEC) to explain the pre-conditions for allowing resumption of mining in the ‘B’ category of mines in Karnataka’s Bellary, Chitradurga and Tumkur districts. This is positive news for the steel companies in the Karnataka region which have been facing iron ore issues after the ban announced in 2011. The CEC had segmented the leases of iron ores into ‘A’, ‘B’ and ‘C’ categories based on the level of illegalities and irregularities allegedly resorted to by them.

Among these three categories the Supreme Court recently allowed mining in the ‘A’ category of 45 mines, including the non-working leases where no marginal illegality has been found. However, of the total of 45 mines only 18 were operational and mining will be allowed only after completing all the formalities, which will take at least six months to a year. Moreover, out of the 18 operational mines, only one mining company has secured all the statutory approvals to restart mining operations. Another 12 leases will become eligible to start mining operations only after obtaining all the statutory approvals.

Therefore the Supreme Court asking the CEC for the details of the pre-conditions for allowing the resumption of category ‘B’ mines is a major initiative to open up more channels of mining. This will be taken very positively by the steel companies in the region. The category ‘B’ comprises 72 mining leases. These are the mines which were found to be involved in illegal mining by way of creating mining pits beyond the permissible limit up to 10 per cent of the lease areas. The CEC panel had earlier recommended that these leases could be allowed resumption only after the reclamation and rehabilitation works were undertaken satisfactorily and penalty was deposited by the leaseholders.

At present the iron ore prices have moved higher by 8-13 per cent after the recent hike carried out by the NMDC. This coupled with subdued domestic demand, risings imports and weakening steel prices have already put pressure on the margin of the steel companies. Companies like JSW Steel, Kalyani Steel and other iron and steel players in the Karnataka region will get major relief from the resumption of iron ore excavation in the ‘B’ category mines. The CEC will submit a written note by next Friday mentioning all the pre-requisites for resumption of mining in those leases.