Karnataka steel industry reeling under mining ban

New Delhi: Reeling under raw material shortages and the extension of a mining ban, the multi-billion dollar Karnataka steel industry is in the doldrums due to continuing uncertainty over iron ore supply to their plants.

The jittery industry was not even optimistic over the release of 25 million tonnes (MT) of iron ore, lying at various mines in the southern state, as the modalities are yet to be worked out.

"Most of the iron ore is lying at the privately owned mines. Suppose the mine owner refuses to share his stock, then what will you do? 25.88 million tonnes availability, which is being talked about, is an ideal scenario only," said a senior official of one of the affected companies in the region.

Echoing similar sentiments, officials of Kirloskar Ferrous, which runs a 50,000-tonne unit for grey iron castings, said, "Quality of the stock is also a big concern.

About 11 MT of the said 25 MT of iron ore is lower grade, having below 60 Fe content, and that cannot be used by most of the companies in Karnataka."

Officials of JSW Steel, which operates a 20 MT iron ore beneficiation plant in the region together with its 10 MT steel plant, also expressed similar concerns over the quality of iron ore stocks lying at mines in the state.

"Quality of the iron ore (stocks at the mines) is not yet established. We can do some beneficiation of ore, but if the Fe content is below 55, then there is a problem," the JSW officials said.

Citing the matter as subjudice, all the officials refused to be identified.

On Friday, the apex court had said it would allow the release of raw material lying at various mines in the state for the iron and steel industry, even as it extended its ban on mining activities to the Chitradurga and Tumkur districts, after Bellary.

The court had also asked the Amicus Curiae and Attorney General to provide details on the quantity of iron ore that could be released from the existing stock of 25 million tonnes, subject to reclamation and rehabilitation plan(s) being submitted before the next hearing on September 2.

"The only silver lining is that the court is willing to release some quantity (of the iron ore stock). But we don't know how much and when. Even if 15 MT is made available, we can run our units at about 80 percent capacity," JSW officials said.