Delay in raising iron ore cap resulting in loss: Industry

The effective delay in the implementation of a Supreme Court decision to raise the limit on production of iron ore by 5 million tonnes (mt) in Karnataka has resulted in a loss of about ~6.5 billion for the state government and industry, claimed industry representatives.

The court in December last year had lifted the cap on the production of iron ore from 30 mt per annum (mtpa) to 35 mtpa for ‘A’ and ‘B’ category mines in Karnataka. It had also asked the monitoring committee, under the Central Empowered Committee (CEC), to act immediately regarding enhancement proposals filed by 13 mining lessees.

H M Khyum Ali, director of the Federation of Indian Mineral Industries (FIMI)-south, on Wednesday wrote to the CEC chairman, requesting for an early decision on these proposals. According to industry experts, the capacity of 35 mt production can be reached only when the cap on individual mines capacity is lifted.

Representatives from the industry said the monitoring panel had called for a few meetings, and sought some information, which were submitted, but no progress was made.

They claimed due to the delay in implementation of the SC’s direction, the Karnataka government has lost about ~1.2 billion revenue, while the industry lost around ~5 billion.

Basant Poddar, former chairman and senior member of FIMI- south, said, “This (the delay) has resulted in grave negative economic and environment repercussions , with Karnataka buying ores from eastern India as well as importing.”

All enhancement proposals were technically evaluated under three parameters — dumping capacity, reserves and resources, and carrying capacity — by relevant authorities. The CEC, on March 2017, referred the cases to the monitoring committee, which delayed the implementation, alleged Ali.

A senior official from the monitoring committee refuted the allegations as “baseless” and said the panel examines matters based on merits. “The committee is mandated to examine all proposals and give its report to the CEC. It will come out with its decision at an appropriate time. The monitoring committee has already sold 150 mt of material from all these mines.”

Thirteen mining lessees in Karnataka had filed a petition before the Supreme Court in May 2016, pleading for an enhancement of the permissible annual production limit in respect of the Category A and B mines. Based on the Central Empowered Committee’s instruction, the state government in August 2017 asked its department of mines and geology to technically evaluate the proposals. The process of reaching a consensus there is yet to conclude.

According to industry sources, the total potential for iron ore mining is 50-60 mtpa, with 40-50 mt from the A and B categories.

The industry claims the delay caused the Karnataka government to lose about ~1.2 billion in revenue, while the industry lost around ~5 billion