Iron ore mining is coming to a standstill in major production centres in Karnataka even as the court battle against the state government's ban on exports is yet to reach a conclusion. Exports from the state have already come to a halt.
Two months since the ban came into force, almost one third iron ore mines in the state have wound up operations and many others have scaled down production. Only mines in the Bellary-Hospet-Sandur region, which produce high-grade iron ore, are operational due to demand for their products in the domestic market. However, they are working at less than 50 per cent capacity.
The producers of low-grade iron ore in Tumkur and Chitradurga regions have shut operations as there is no demand for their products in the domestic market. Out of 90 operational mines in the state, 30 have closed down. A little more than three million tonnes low-grade iron ore is stocked in their mines, causing losses worth crore of rupees to the miners.
As against the monthly production of 3.5 million tonnes, mines in Karnataka are churning out less than 1.5 million tonnes. In the last two months, the miners have sold hardly 800,000 tonnes high-grade iron ore to domestic steel mills, say industry sources. In Karnataka, which contributes around 30 per cent to the country’s iron ore exports at 30 million tonnes annually, about 75 per cent iron ore is low-grade and only 25 per cent is high-grade.
“We have managed to pay wages to employees for two months now thinking that the court case will come to an end early. But, we cannot continue to pay them wages without work. If the court verdict does not come early, things will worsen,” said Basant Poddar, managing director, Mineral Enterprises Limited, a producer of low-grade iron ore in the Tumkur region.
The mines in Tumkur and Chitradurga regions employ around 2,000 workers directly, who earn between Rs.200 and Rs.500 per day depending on the additional working hours. Already, tractor drivers, lorry operators and daily wage earners have lost their jobs. These workers are planning to take a delegation to the chief minister by the end of this month to seek withdrawal of the export ban.
On July 26 this year, the Karnataka government imposed a ban on export of iron ore from ports in the state and subsequently restricted the issue of mineral dispatch permits on July 28 for movement of iron ore to domestic steel mills.
Some iron ore producers that have stopped their operations include Mineral Enterprises Limited, Tumkur Minerals, Lata Mines, Milan Minerals, SN Singh, Ganapathi Singh, Sudarshan Singh, Balaji Produce Co and Dasharath Ram Reddy.
New formula for ore transport
The Karnataka government has reworked the mineral transport permits (MTPs) issued to miners for transporting iron ore to domestic steel mills. The government has offered to issue the permit with a day’s validity for every 100 km and eight days for 500 km and above. The distance is from the mine to the destination.
At a recent meeting convened by the government on the direction of a Division Bench of the Karnataka High Court, mines and geology department officials proposed issue of MTPs with validity of eight days for long distance movement for a single mode of transport. If the entire material is to be transported by railways, one permit per rake will be issued. The validity period for such as permit will be 15 days.
The director of mines and geology, forest officials, the advocate general of the Karnataka High Court, Ashok Harnahalli, the counsels for mining companies, among others, attended the meeting.
The government has also offered to issue one permit per railway rake depending on the capacity of the rake (3,800 tonnes) with a validity of 15 days. The transport of mineral by road from mine-head to a storing point near the rail head will be regulated by issue of trip sheets and forest way permits will be issued in case of minerals excavated from forest areas. The duration for transport from mines to the point of storage at the rail-head will be based on the actual distance, which is one day for a maximum distance of 100 km. “The solution offered by the government is not completely acceptable to us as most destinations are less than 500 kms from the mines. This means each miner will hardly get one to three days for transporting ore. We will submit our views to the high court during the next hearing on September 24,” a miner, who is contesting the government’s ban on export of iron ore, told the media.
The state government has also decided to post officials from departments of mines and geology and forest at mine-heads to issue instant mineral dispatch and forest way permits for trucks that leave the site.
The department of mines and geology will do away with the issue of bulk permits, as provided in the rules. However, the applicants will be able to file a single application for issue of one permit for one vehicle for a bulk quantity. The department will issue an order for releasing permits after due verification and ensuring that the royalty has been paid for the quantity applied for. Last week, Harnahalli informed the high court the measures taken by the government to check illegal mining.
The government has said permits will clearly show the mining lease number, the details of the lessee, the vehicle number, the quantity loaded, the duration of the validity as well as the destination. The forest department has agreed to complete the necessary enquiries within three days from the date of the issue of the release order of the mines and geology department.
Two months since the ban came into force, almost one third iron ore mines in the state have wound up operations and many others have scaled down production. Only mines in the Bellary-Hospet-Sandur region, which produce high-grade iron ore, are operational due to demand for their products in the domestic market. However, they are working at less than 50 per cent capacity.
The producers of low-grade iron ore in Tumkur and Chitradurga regions have shut operations as there is no demand for their products in the domestic market. Out of 90 operational mines in the state, 30 have closed down. A little more than three million tonnes low-grade iron ore is stocked in their mines, causing losses worth crore of rupees to the miners.
As against the monthly production of 3.5 million tonnes, mines in Karnataka are churning out less than 1.5 million tonnes. In the last two months, the miners have sold hardly 800,000 tonnes high-grade iron ore to domestic steel mills, say industry sources. In Karnataka, which contributes around 30 per cent to the country’s iron ore exports at 30 million tonnes annually, about 75 per cent iron ore is low-grade and only 25 per cent is high-grade.
“We have managed to pay wages to employees for two months now thinking that the court case will come to an end early. But, we cannot continue to pay them wages without work. If the court verdict does not come early, things will worsen,” said Basant Poddar, managing director, Mineral Enterprises Limited, a producer of low-grade iron ore in the Tumkur region.
The mines in Tumkur and Chitradurga regions employ around 2,000 workers directly, who earn between Rs.200 and Rs.500 per day depending on the additional working hours. Already, tractor drivers, lorry operators and daily wage earners have lost their jobs. These workers are planning to take a delegation to the chief minister by the end of this month to seek withdrawal of the export ban.
On July 26 this year, the Karnataka government imposed a ban on export of iron ore from ports in the state and subsequently restricted the issue of mineral dispatch permits on July 28 for movement of iron ore to domestic steel mills.
Some iron ore producers that have stopped their operations include Mineral Enterprises Limited, Tumkur Minerals, Lata Mines, Milan Minerals, SN Singh, Ganapathi Singh, Sudarshan Singh, Balaji Produce Co and Dasharath Ram Reddy.
New formula for ore transport
The Karnataka government has reworked the mineral transport permits (MTPs) issued to miners for transporting iron ore to domestic steel mills. The government has offered to issue the permit with a day’s validity for every 100 km and eight days for 500 km and above. The distance is from the mine to the destination.
At a recent meeting convened by the government on the direction of a Division Bench of the Karnataka High Court, mines and geology department officials proposed issue of MTPs with validity of eight days for long distance movement for a single mode of transport. If the entire material is to be transported by railways, one permit per rake will be issued. The validity period for such as permit will be 15 days.
The director of mines and geology, forest officials, the advocate general of the Karnataka High Court, Ashok Harnahalli, the counsels for mining companies, among others, attended the meeting.
The government has also offered to issue one permit per railway rake depending on the capacity of the rake (3,800 tonnes) with a validity of 15 days. The transport of mineral by road from mine-head to a storing point near the rail head will be regulated by issue of trip sheets and forest way permits will be issued in case of minerals excavated from forest areas. The duration for transport from mines to the point of storage at the rail-head will be based on the actual distance, which is one day for a maximum distance of 100 km. “The solution offered by the government is not completely acceptable to us as most destinations are less than 500 kms from the mines. This means each miner will hardly get one to three days for transporting ore. We will submit our views to the high court during the next hearing on September 24,” a miner, who is contesting the government’s ban on export of iron ore, told the media.
The state government has also decided to post officials from departments of mines and geology and forest at mine-heads to issue instant mineral dispatch and forest way permits for trucks that leave the site.
The department of mines and geology will do away with the issue of bulk permits, as provided in the rules. However, the applicants will be able to file a single application for issue of one permit for one vehicle for a bulk quantity. The department will issue an order for releasing permits after due verification and ensuring that the royalty has been paid for the quantity applied for. Last week, Harnahalli informed the high court the measures taken by the government to check illegal mining.
The government has said permits will clearly show the mining lease number, the details of the lessee, the vehicle number, the quantity loaded, the duration of the validity as well as the destination. The forest department has agreed to complete the necessary enquiries within three days from the date of the issue of the release order of the mines and geology department.
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