KOLKATA (miningweekly.com) - India’s provincial government of Karnataka has sought an increase to the court-imposed cap on iron-ore mining from 30-million to 40-million tonnes a year.

According to an official in the provincial government, the number of miners seeking to resume mining operations had increased over the past few months and they would be able to do so only if the ceiling on total yearly production set by the Supreme Court was relaxed.

The government has approached the federal Mines Ministry to make a fresh petition before the apex court, seeking a relaxation of the production cap, against the backdrop of a changed mining environment in the resource-rich southern Indian province, the official said.

In January, the Supreme Court turned down a similar petition by the Steel Ministry seeking a relaxation of the production cap on the grounds of the shortage of iron-ore faced by domestic steel producers.

In 2011, the Supreme Court imposed a complete ban on iron-ore mining in the province based on reports prepared under its supervision by the Central Empowered Committee, which substantiated allegations of widespread illegal mining across all mines.

In an order in April 2013, the apex court permitted resumption of operations at 117 mines with minor violations (Category A/B), and the cancellation of the leases of 49 major violators (Category C) and the fresh issue of mining lease for these assets subject to the overall annual quantitative restrictions.

Government officials said that 16 mining companies have applied for fresh mandatory approvals, including clearances from the Forest and Environment Ministry to resume mining operations in Karnataka.

This was in addition to the 23 mines that had already commenced operations in course of the last year after the court laid down conditions to mining. These mines would have an estimated production of between 20-million and 22-million tonnes a year.

According to information available from the Federation of Indian Mineral Industries (FIMI), which was providing support services to miners to adhere to reclamation and rehabilitation (R&R) orders set out by the court, so far 91 mines had secured approval of their R&R plans but only 23 had been able to start operations.

According to FIMI, iron-ore production from Karnataka was expected to touch 23-million tonnes during 2014/15.

However, the government official said that urgency to increase the yearly production cap was necessary against the backdrop of demand from steel producers located in the region.

He said that steel plants located in the region had an estimated demand of 35-million to 40-million tonnes a year and shortages of raw material had forced them to reduce capacity utilisation to between 70% and 80%.

Based on existing demand for iron-ore from the steel plants, the local government had sought a higher production cap of 40-million tonnes a year, he said.

This, however, had not taken into consideration incremental raw material demand from new projects or brownfield expansions of existing steel plants, he added.