core sector communique

Lifting of iron ore mining ban in South India

 

Leading industrial chamber of India, ‘ASSOCHAM‘ has said that a blanket ban on iron ore mines in Bellary-Hospet region of southern Indian state of Karnataka will lead to abrupt stoppage of supplies to steel plants and leave lakhs of workers jobless.

 The Supreme Court should ask the Central Empowered Committee (CEC) to undertake a detailed review of iron ore mining leases so that those engaged in legal mining are allowed to continue operations, it said.

Mining should be moved from unorganised sector to organised if it is to be done in a legal, scientific and environment-friendly manner, said The Associated Chambers of Commerce and Industry of India (ASSOCHAM) while appreciating the Supreme Court’s decision to suspend 19 entities because of illegal mining on the basis of a CEC report.

 But if the Supreme Court decides to suspend another 68 mines as was done in case of 19 mines, then the industry would be left with only four to five mines, said ASSOCHAM’s secretary general D.S. Rawat.

“The daily supply from four to five mines will not exceed 20,000 tonnes against the requirement of one lakh tones. As a result, the entire industry in the region will come to a grinding halt within two or three days and closure will become inevitable.”

The CEC has suggested banning of all mining activities even on the basis of some technical violations. Mr Rawat said the best solution to the problem is that technical violations and illegal mining should be segregated in its report.

The mines having technical violations should be given time to remove these violations. “In case of failure to do so within a stipulated period, they should be closed. Illegal mining should be banned outright,” said Mr Rawat.

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 units located in Maharashtra, Gujarat, Andhra Pradesh, Tamil Nadu and dozens of small and medium-sized sponge iron units.

“There is apprehension that in case a conclusion is arrived at by the apex committee without studying individual agreements and makes a prima facie determination of illegality, it could result in wrongful closure of many mines,” said Mr Rawat.

Steel, iron and other industries have invested Rs 62,000 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 10,000 crore a year in the form of excise duty, royalty and value added tax.”

There is also a commitment of all these industries which are fully booked during 2011-12 for import of 20 million tonnes of coal and the first quarter of steel supply to customers and export orders.

Keeping in view the huge investments, employment of lakhs of workers, social responsibilities and dependency of industries on iron ore, ASSOCHAM earnestly requests uninterrupted availability of iron ore lumps and fines to meet industrial requirement while framing policies.