Iron ore export to help Andhra Pradesh, miners

Anantapur/Nellore: Following the directions of the Supreme Court in allowing domestic sale or export of large quantities of already excavated iron ore from the mines of Ballari, Chitradurga, and Tumukuru districts in Karnataka has come as an opportunity for many to clear their dumps in mining areas.

In the wake of illicit mining activities and digging of rich quality of iron ore in more than 250 iron ore mines of three districts, the Karnataka government banned export of iron ore a decade ago. High-quality iron ore is available in Bellary and parts of Chitradurg and Tumkur and Rayadurgam in Andhra Pradesh borders.

Rayadurgam junior civil court jailed Obulapuram mining company managing director Sreenivasa Reddy, a close relative of Gali Janardhan Reddy, for threatening the then Anantapur divisional forest officer who went to inspect the surplus mining of iron ore a couple days back.

Janardhan Reddy, who had planned to establish Brahmani Steels in Kadapa district, was unable to complete it after he was arrested in connection with illicit mining activities.

Sources from Anantapur forest department and also mines department told Deccan Chronicle that there are no stocks of iron ore in the state.

Tapal Ganesh, a mining company owner from Bellary, thanked the apex court for allowing exports.

"In the past two decades, political pressures and collusion of officials had led to large irregularities in mining activities ", Ganesh observed.

However, the move will also boost Krishnapatnam port, customs department, transport industry and Indian railways.

The port had exported nearly 10 MMT to 12 MMT in two years prior to the 2011 ban on exports. A port source said that it is now a win-win situation for the government as well as the steel industry. He said steel prices would come down once iron ore is available freely.

The official said the port has the capacity to handle big vessels and has more storage areas, making it convenient for mining companies.

“Though there are ports nearby like New Mangalore, Belekeri and Port of Mormugao, they are not preferred because of the ghat section. Krishnapatnam is preferred because of the good condition of roads and superior railway connectivity,” he said, referring to the new railway line between Obulapuram and Krishnapatnam Port.

He said transporters and small traders will also benefit because one truck in operation will create 10 jobs.

On the flip side, the export potential is dependent on the percentage of iron among other minerals.

Though there is no customs duty on iron ore below 58 per cent of Fe, basic customs duty to the extent of 30% is being imposed on iron ore with 58% to 62% of iron content. Export is not permitted if Fe content is beyond 63%.

Customs duties and strict regulations are to ensure sufficient supply of iron ore for domestic steel industries, a former customs official said.