Iron-ore production resumes in Karnataka

By: Ajoy K Das
4th July 2012
KOLKATA (miningweekly.com) - The two-year old blanket ban on iron-ore mining in the southern Indian province of Karnataka, imposed in wake of widespread illegal mining, was likely to be selectively lifted starting in August.

The resumption of operations would likely take place in some 15 iron-ore mines where violations of mining laws were found to be marginal, an official of the Federation of Indian Mineral Industries (FIMI) said.

As per the Supreme Court directive, detailed reclamation and rehabilitation (R&R) for these mines have already been submitted to the court-appointed Central Empowered Committee (CEC) and once these were approved, mining operations could restart by the end next month, the official said.

The progressive reopening of these mines could lead to resumption of operations of at least 50 more mines with annual capacity of 15-million tons a year, over the next six months, FIMI said.

The Indian Council for Forest Research and Education has collaborated in preparation of detailed R&R plan for each of the mines and would be submitted for approval to the CEC shortly.

However, it was still unclear how much of the incremental iron-ore production would go to the export market, since a large number of steel production facilities in the province were reeling from shortage of iron-ore and operating at less than 50% of installed capacity.

Karnataka accounted for 25% of India’s normal iron-ore exports of 110-million tons. However, with imposition of ban in the province and also in Goa in western India, the country’s exports had fallen to about 60-million tons in 2011/12 from 97-million tons in the previous year.

The production decline has forced the world’s third-largest iron-ore exporter to become an importer, with 300 000 t of ore shipments recorded during March and May. According to a Morgan Stanley report, South Africa was poised to pip India as the third-largest iron-ore exporter based on shipments during the current months.

Iron-ore exports from Orissa, the largest iron-ore producing province in India, had dropped 46% to 12.96-million tons in 2011/12 against 24.12-million tons in the previous year as a fallout of imposition of 30% export tax and restrictions on movement of ore by road across the province.

Edited by: Esmarie Swanepoel