Karnataka: Mine barons jittery over move to auction C' mines
It will likely be a disadvantage to existing operators.'
Ballari: The state government’s move to auction category ‘C’ iron ore mines in mid-February, has run into rough weather with industry insiders saying the auction is likely to place existing mining operators at a disadvantage.
In pursuance of the Supreme Court’s order, dated December 22, the state government has issued a notification inviting tenders for allocating 14 category C mines to end-users through competitive on-line auction. February 8 is the last date for submitting bids.
The Supreme Court in its order on April 18, 2013 had cancelled the licenses of 51 mining leases in Ballari-Chitradurga and Tumakuru for gross illegalities and directed the state government to auction only mines engaged in the production of steel, sponge iron or pig iron or pellets. At the same time, the apex court fixed the maximum permissible limit for production of iron ore in Karnataka at 30 million tons per year. But industry insiders say the demand of end-users is only 25.3 MT.
“Now, the state government is set to auction 14 C mines in the first phase. This would increase production capacity by another 11 MT”, said a industry analyst. “The existing mining operators cannot sell ore to a person other than end-users in Karnataka. If these end-users buy C mines in the auction and use the ore from these mines, there will be no buyers for ore of existing mining operators,” said a mining lessee.
Sources said the quantity of ore from category “A”, “B” and state-owned NMDC and Mysore Minerals Ltd- altogether 50 mines- is already 30.66 million tones per year which exceeds the apex court permitted limit of 30 MT.
The state government’s auction of 14 C category mines having 196 MT ore reserves would add 9.8 MT ore per year and increase the production capacity of ore from Karnataka to 40.46 MT per year- 10 MT in excess of the limit fixed by the apex court. When the demand for ore in Karnataka is not more than 25.3 MTs and already there is excess production, there is no need to auction ‘C’ mines
, says miners, who fear they may have to close down operations.
Mr I.G. Pulli, activist with National Committee for Protection of Natural Resources, argues that the term of many mining leases is coming to an end in 2020 and the production of ore will fall then. These C category mines will be needed then, so the auction of mines should be deferred to 2020, he says.