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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