Saturday, August 18, 2012

SBB Breaking News - Ore mining operations resume in Karnataka after year's ban


Ore mining operations resume in Karnataka after year's ban


After more than a year, Karnataka-based iron ore miner Mineral Enterprises Ltd (MEL) resumed mining operations on Thursday at its Chitradurga mine. This followed the granting of permission by the southern Indian state’s department of mines and geology, a senior company official told Platts Steel Business Briefing.

“We are back in business,” the official said. “We are the first to restart (iron ore) mining operations in the state. This is a significant development in the sense that mining has commenced again in Karnataka,” he added. 

MEL has been granted approval to mine up to 380,000 tonnes/year of ore from the mine which previously produced 700,000 t/y, the official said. He expected it would take about a month from now for MEL to offer its first ore consignment for sale through the electronic auctions being conducted by state-owned trader MSTC.

India’s Supreme Court enforced a ban on mining in the state since August 2011 after investigations conducted by the court’s Central Empowered Committee (CEC) highlighted environmental damage brought about by rampant illegal mining. Only state-owned miner NMDC was permitted to produce and sell ore through the MSTC auctions. 

Following a series of hearings, in April the court accepted the CEC’s recommendations that some mines deemed legal be allowed to restart following reclamation and rehabilitation but that the state’s total output be capped at 30m t/y.

MEL’s Chitradurga mine was among the few recently approved by the CEC for restart. Sesa Goa’s operation in Chitradurga also figures in the committee’s list but final approvals to restart were yet to be received, a company spokesman told Platts SBB on Friday. 

The restart of mining in Karnataka is not seen likely to affect the export market in the near-term. This is because ore produced in the state will continue to be sold through electronic auctions for at least another two years with only domestic end-users eligible to participate in these sales, the Supreme Court ruled in April. 

No comments: