Monday, September 3, 2012

SBB Breaking News - Indian court permits restart of 18 iron mines in Karnataka

In a hearing on Monday morning, the Indian Supreme Court granted permission for the restart of operations at 18 iron ore mines in the southern state of Karnataka, industry sources confirmed to Platts Steel Business Briefing. Although a written order from the court is awaited, the ruling signals the end of a year-long ban on mining in the state.

Ore output from these mines would average some 4-5m tonnes/year combined, sources estimated. This would be in addition to the 1m tonnes/month that state-owned miner NMDC has been tasked by the court to produce since August 2011, when the ban came into effect.

Nevertheless, sources remain sceptical over how soon the additional 4-5m t/y of ore would be produced and made available to the market. The court is believed to have said that the 18 mines, where no illegal operations had been conducted, could resume ore production subject to all statutory clearances being in place. How many of the 18 mines satisfy this prerequisite is unknown.

Another issue that could hamper uninterrupted production from some of these mines is the renewal of mining leases that are due to expire. For instance, a large Chitradurga-based miner, which is among the 18 permitted to restart production, will see its lease expire in the first week of October. How long it would take for the lease to be renewed is yet unclear, an official with the mining company told Platts SBB. The court is believed to have said in a hearing last Friday that operations at mines must cease should mining leases or other clearances lapse before they are renewed.

“All output is not going to come online tomorrow itself,” the mining company official said. “But this is still a good start, at least some progress has been made,” he added. 

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