Absence of export duty and relatively low capital requirement make it an attractive option

Iron ore miners in Karnataka, facing uncertainty over possibility of exports in the near future, are increasingly looking at new opportunities to earn higher profits. A large number of miners is exploring the possibility of diversifying into manufacturing and export of pellets, because of the absence of any duty on pellet exports. At present, the demand for pellets in India is estimated at 37 million tonnes per annum (mtpa) and is projected to double to 76 mtpa by 2016-17.

The Karnataka government has proposed to offer land to South Korean steel major Posco in Bagalkot or Yadgiri districts in north Karnataka to set up their 6 million tonne per annum steel plant. The decision comes after the stiff opposition put forward by farmers of Halligudi in Gadag district last year from acquiring their land for the proposed steel plant.

“The government has decided not to acquire land at Halligudi as some sections of farmers are opposed to parting with their land. We are in possession of sufficient land in Bagalkot and Yadagiri districts and we are ready to provide land to the company in these two places,

The Karnataka government is actively considering the possibility of changing the location for a proposed steel plant of Posco in north-central Gadag district; instead offer the South Korean major an alternative land elsewhere in the state. The move comes after the farmers of Halligudi village stiffly opposed plans to acquire their “fertile” land ahead of starting work on the project.

India’s iron ore exports are set to fall to a new low this financial year, owing to multiple problems, such as shortages in Karnataka, Odisha and Goa, high export duty and differential railway freight. Compared to 2011-12, which witnessed a year-on-year decline of 38.5 per cent in exports at about 60 million tonnes, the current year (2012-13) may see an all-time low of 45-50 mt, a drop of 16-25 per cent over last year.

“We are not in a position to make any estimation for exports during the current year. But, going by the prolonged ban on mining in Karnataka, restriction on mining in Odisha and Goa, along with a high railway freight rate and 30 per cent export duty, export of iron ore is no longer a viable proposition,” said R K Sharma, secretary general, Federation of Indian Mineral Industries (Fimi).

SC nod can lead to production of 6-7 mt from 49 category A, B mines

The shortage of iron ore in Karnataka is likely to ease by July, as regular mining is expected to resume in a couple of months from now. The Supreme Court-appointed authorities are preparing reclamation and rehabilitation (R&R) plans, stoking hopes of an end to the stalemate. Once the apex court approves the plans, mining can resume in 49 leases of 50-hectares and above falling under the A and B category mines in the districts of Bellary, Chitradurga and Tumkur.

With barely eight million tonnes (mt) of iron ore left for auction in Karnataka, sufficient to fire the steel mills’ furnaces for two months, iron and steel companies in and around the state, including JSW Steel and Kalyani Steel, are in dire need of the key raw material.

In the absence of regular mining, they expect the Supreme Court to give a nod for auctioning another two to four mt of additional ore stored at various stockyards of miners and private traders. The apex court is resuming the hearing on the illegal mining case tomorrow.

Proposes allowing one category of 45 lessees for now, with strict riders including approved R&R plan in line with earlier guidelines; more stringency for others

The Central Empowered Committee (CEC) appointed by the Supreme Court to probe illegal mining in Karnataka has recommended restarting of operations in one of the three categories of leases, with riders. The SC is to hear the case tomorrow.

The Central Empowered Committee (CEC), appointed by the Supreme Court to inquire into illegal mining and related cases in Karnataka, is likely to give its final report to the apex court tomorrow. The report would cover three cases relating to JSW Steel, Adani Enterprises and former chief minister B S Yeddyurappa.

In its report, the CEC is likely to state whether a Central Bureau of Investigation (CBI) inquiry is required on the bribery charges against Yeddyurappa.

Steel industry says its operations may come to a halt within two months if SC does not approve resumption of regular mining

The scarcity of iron ore is set to worsen in Karnataka in the next one or two months, as the ore sold through electronic auctions (e-auctions) is depleting fast. Of the 25 million tonnes (mt) of stockpile earmarked for auctioning, the monitoring committee supervising the auctions has so far released only 15 mt.

If court puts a cap on iron ore mining in Karnataka, it will be a severe blow to steel industry's expansion plans

The Central Empowered Committee’s (CEC) final report on illegal mining in Karnataka submitted to the Supreme Court recently has sent shockwaves through the iron ore mining and steel industry in the state. Some of the recommendations of the CEC, if accepted by the Supreme Court, will curb illegal mining and that is a laudable goal. However, in doing so, it may also deliver a hammer blow to the state’s expanding steel industry.