Iron and steel makers in Karnataka today said the sustainable operations of value adding iron & steel plants in the state are in "life threatening" crisis due to ban on iron ore mining.

Ever since the ban of iron ore mining in Karnataka in September 2011, the sponge iron plants, mini and mega integrated steel plants have been operating at sub-optimal levels due to huge scarcity of iron ore leading to closure of large number of sponge iron plants in the State, Karnataka Iron & Steel Manufacturers' Association and Association of Indian Mini Blast Furnaces said.

Stating that the overall exchequer contributions to the state also suffered hugely due to this, it said: "The present crisis is life threatening to the sustainable operations of value adding iron & steel plants in Karnataka.

"Hence it is essential to enhance the iron ore availability by bringing the balance Category 'A' &'B' mining leases to operations, immediately."

Many of them are pending for want of approval with various agencies such as Government of Karnataka, Ministry of Environment and Forest, the associations said in a release.

The release said the situation can be improved by expediting forest clearances, renewal of mining leases, approvals for temporary working permission, amalgamations and sorting out land disputes (forest/non-forest land)."

It is also possible to increase the maximum permissible production quantity of certain mines by re-visiting the revised parameters within the frame work and directions of the Supreme Court," it added.

The associations also said "auctioning of category 'C' mining leases for the end-users have to be carried out within 2-3 months, as directed by Central Empowered Committee and also the grant of fresh mining leases to the industries to reach the permissible production level of 30 mtpa."

They appealed Government of Karnataka to consider time bound implementation of the above proposal including renewal of mining  leases, forest clearances and auctioning of category 'C' leases to ensure availability of iron ore to the Industries. 

Illustrating on the iron ore availability in the state, the release said: "The Iron ore requirement of Iron & Steel Industries who are dependent upon iron ore from Karnataka is estimated at 36 million tonnes per annum (mtpa)."

"As on today, only 21 mining leases in Karnataka have resumed mining operations with the annual production capacity of 9.70 mtpa. Hence the total iron ore production in Karnataka is around 18 to 19 mtpa including 9 mtpa produced by NMDC."

"There is a huge shortfall of production of around 12 million tonnes to even meet the cap of 30 mtpa imposed by the Supreme Court, let alone the existing requirement of 36 mtpa of the Iron & Steel Industries," it added.

Supreme Court has allowed production of 12 mtpa iron ore from NMDC in 2011 and subsequently, vide orders in September 2012 & April, 2013 allowed the resumption of mining operations in category 'A' & 'B' mining leases subject to obtaining all statutory clearances and implementation of R&R plan.