Apprehending further hardships for the steel industry, the Centre on Tuesday came in support of the Karnataka government in urging the Supreme Court to raise iron ore production in the state to 50 million metric tonnes (MMT) annually.
The steel ministry filed an application contending that the limit of 30 MMT, fixed earlier by the apex court, was “insufficient” to meet the annual requirement of the industry, which is dependent on iron ore production in Karnataka.
“India, the fourth largest producer of steel in the world, is likely to become the second largest globally. But the industry has suffered on account of regional shortage of iron ore, particularly in Karnataka,” the application said.
Pointing out that 32 sponge iron plants have stopped operation, it said, “The production of finished steel had seen a meager growth of 2.5 per cent in the year 2012-13 in the country, while consumption has grown up by 3.25 per cent.”
“The capacity utilization of the Indian steel industry has touched an all-time low at 81 per cent. Severe shortage of iron ore in Karnataka has also contributed to low capacity utilization,” the application read.
In its plea, the Karnataka government had sought permission from the apex court to raise the annual iron-ore production to the level of 40 MMT from the current 30 MMT, to meet industry demand.
The state government also wanted permission to execute fresh lease deeds to produce an additional 10 MMT of iron ore in Bellary, Tumkur and Chitradurga districts.
In an intervention application, the steel ministry has now sought direction to the Karnataka government, Central Empowered Committee and monitoring committee, to expedite the opening up of all category A and B mines in a time-bound manner.
It also wanted direction to the state government to complete the process of auctioning C category mines.
At present, 17 mines have started operation in the state. During April to September, this year, total production was recorded at 6.9 MMT, which would rise to 16 MMT only.