KOLKATA (miningweekly.com) - The iron-ore-rich southern Indian province of Karnataka was considering restricting the issue of fresh mining leases to allow for captive ore use by steel mills.
According to an official of the provincial government of Karnataka, mining leases which had been cancelled for illegal mining operations would be issued afresh but the new leases would be allotted only to steel plants and not to merchant miners for ore production and sales.
The move was a leaf out of neighbouring Odisha's book, which was in the process of implementing a new iron-ore mining policy under which second and subsequent renewal of mining leases would be only for captive mining or miners who had downstream value additional investments.
As previously reported by Mining Weekly Online, the Odisha government’s move came under fire from the mining industry and experts on the grounds that it would be the death knell for the standalone mining industry, a well entrenched trend in the global mining industry.
However, despite the new intentions of the Karnataka government, according to the Federation of Indian Mineral Industries (FIMI), iron-ore mining operations in the province was unlikely to resume fully before at least another 6 to 12 months, owing to delays in complying with court-mandated preconditions and securing fresh mandatory approvals by leaseholders.
India’s Supreme Court in 2011 banned iron-ore mining in Karnataka in the wake of investigations into illegal mining in the region. In an order handed down in April 2013, the apex court permitted resumption of operations in 117 mines with minor violations (Category A or B) and cancelled mining leases in the case of 49 major violators (Category C), ordering that fresh leases for these assets be applied for.
According to FIMI, only 12 mines have been able to resume operations since the court order, as most others were yet to complete the terms and conditions laid down by the Supreme Court, including court-approved reclamation and rehabilitation plans and environmental protection measures.
According to the Indian National Mineral Inventory, Odisha accounts for 33.9% of the country’s 28.52-billion iron-ore reserves while Karnataka held 12.3% of the reserves.