Steel mills in K'taka face shortage of iron ore

This is because as per the Supreme Court orders, the Department of Mines & Geology has issued notices to majority iron ore mines in Bellary district to stop all kinds of mining activity including transportation of mined material, virtually crippling the supply of raw material to the steel industries in the region.

Steel makers have pointed out that in order to commence the survey from 16th May 2011, Director, Department of Mines and Geology, Govt. of Karnataka has issued orders to all concerned lease holders on 13th May 2011 to stop all kinds of mining activities and transportation of ore with immediate effect. It has also directed mines to surrender all the mineral dispatch permits and relevant trip sheets.

BCIC said “We would like to submit that the above order of the Director is contrary to the Supreme Court order as the Apex Court had not given any direction to completely stop all the mining activity in the district. In fact, it had asked to assess the encroachment in a scientific manner without affecting the current operations.”

The mines in Karnataka supply iron ore to several large steel plants like JSW, Kirloskar Ferrous, Mukand Ltd and Kalyani Steels. The state also supplies raw material to dozens of small and medium-sized sponge iron units located in Maharashtra, Gujarat, Andhra Pradesh, Tamil Nadu.

Steel, iron and other industries have invested about Rs 70,000 crore in the landlocked Bellary-Hospet region as it has abundant availability of iron ore.

“The state finances will be adversely affected as these industries are paying to the tune of Rs 8,000 crore a year in the form of excise duty, royalty and value added tax,” said Assocham Secretary General D S Rawat.

Keeping in view the huge investments, employment of lakhs of workers, social responsibilities and dependency of industries on iron ore, chambers requested urgent restoration of uninterrupted availability of iron ore lumps and fines to steel mills.