With trading of iron ore outside the state restricted, miners worry about how to clear the massive pile-up
With trading of iron ore outside the state restricted, miners worry about how to clear the massive pile-upu00a0
THE government's efforts to discourage iron ore export in order to curb illegal mining tends to give rise to further illegalities in the business, with no takers for the surplus ore which is lying in yards.
The Yeddyurappa government had restricted the iron ore from moving out of the state through notifications issued last week. The intention was to feed the raw material to local steel plants, while putting brakes on illegal activities in the mining business.
With the restriction in force, the miners are not sure how to clear the piled up stock. While the total production ore in the state, as on March end, is 49 million (mn) tonnes, the demand from the local steel plants is only 20.4 mn tonnes.
"The government should have thought of this before issuing the notice," said Ragahava Setty, vice-president, S K Modi and Bellary Iron Ores Pvt Ltd.
"Apart from slowing down of mining business that results in job losses, it puts the miners in a tight spot, as they will not be able to fulfill their contractual obligations with the customers outside the state and the country," he added.
Counterproductive
Setty was worried that the move would be counterproductive as the traders find ways and means to take out the ore and that would only increase corruption at the check-posts.
Accepting the fact, Sajjan Jindal, vice-chairman and managing director, JSW Steel, told MiD DAY, "While banning exports of ore is welcome, it should be done in phases. If the government takes such a drastic step suddenly, these kind of problems will naturally arise."
JSW Steel is the largest consumer of iron ore with the demand of 11.9 mn tonnes. Others including Kalyani Group, Mukund Steels, BMM Ispat, and Kirloskar Ferrous Industries consume another 8.5 million tonnes.
Jindal hoped the local industry would expand to consume the entire supply in the near future with big players like ArcellorMittal, POSCO, and Tata having signed an MoU with the state government, during the Global Investors Meet last June to start their plants.
However, he suggested the government make the miners run value added steel plants mandatory. "In my opinion, no one should have a mining licence without owning a steel plant.
u00a0
This can be done with some political will. But looking at the prevailing problem, I suggest the state government allowing part of the ore in the stock for export this year," said Jindal. He added the export could be banned in phases for over five years now.
Brownie points?
However, going by the aggressive approach of chief minister B S Yeddyurappa to the issue, one can't hope for it. "The chief minister wants to gain political brownie points while settling scores against the Reddy brothers," said a senior minister in his cabinet. "I believe he may soften his stand."
In what looks like a second lap of the political battle between Yeddyurappa and the Reddys, the chief minister seems to have an upper hand though the mining lords have apparently not stopped scheming.
Allegations galore
With the piled up stock of ore posing a big problem, the Bellary Hospet Mine Owners Association has levelled a serious allegation against the steel plant owners saying that they were indulging in purchasing the ore at a cheaper rate and transporting it out from the state.
"Biggies like JSW Steel have steel plants outside the state and hence, have a chance of taking the ore out of state on the pretext of supplying it to their own plants," said Hothur Mohammed Iqbal, secretary of Bellary Hospet Mine Owners Association.
u00a0
"I demand auditing the ore with the steel plants, and then you will get to know how much of ore has been illegally purchased," he added.
Rubbishing the allegations, Jindal said, "We don't indulge in such activities. We are ready for any such auditing."
Iqbal was concerned about the mineworkers, once the business slows down.
"At least two lakh workers work in some 80 mines across the district. What will happen to them? Is it not the government's responsibility to protect their interest?" he asked.
Declining to soften his stand, Yeddyurappa told reporters on Sunday in Shimoga, "Mine owners have to look after their employees and I will not yield to such emotional arguments. There is no question of looking back on this issue."
102
Number of mining licences issued in the state
82
Number of functional mines
Demand & Supply
The Federation of Indian Mineral Industries reports the total amount of iron ore extracted in the state, until last March, is 49 million tonnes.
While the mines in Hospet and Sandoor yielded 35 mn tonnes, mines in Bellary produced 10 mn tonnes. Two million tonnes were extracted from the mines in Chitradurga and four million tonnes was produced in the mines in Tumkur and Chikkanayakana Halli.
JSW Steel is the largest consumer of iron ore with the demand of 11.9 mn tonnes. Others including Kalyani Group, Mukund Steels, BMM Ispat, and Kirloskar Ferrous Industries consume another 8.5 mn tonnes.
THE government's efforts to discourage iron ore export in order to curb illegal mining tends to give rise to further illegalities in the business, with no takers for the surplus ore which is lying in yards.
The Yeddyurappa government had restricted the iron ore from moving out of the state through notifications issued last week. The intention was to feed the raw material to local steel plants, while putting brakes on illegal activities in the mining business.
 |
| The Bellary Hospet Mine Owners Association is alleging that the steel plant owners are indulging in purchasing iron ore at a cheaper rate and transporting it out of the state |
With the restriction in force, the miners are not sure how to clear the piled up stock. While the total production ore in the state, as on March end, is 49 million (mn) tonnes, the demand from the local steel plants is only 20.4 mn tonnes.
"The government should have thought of this before issuing the notice," said Ragahava Setty, vice-president, S K Modi and Bellary Iron Ores Pvt Ltd.
"Apart from slowing down of mining business that results in job losses, it puts the miners in a tight spot, as they will not be able to fulfill their contractual obligations with the customers outside the state and the country," he added.
Counterproductive
Setty was worried that the move would be counterproductive as the traders find ways and means to take out the ore and that would only increase corruption at the check-posts.
Accepting the fact, Sajjan Jindal, vice-chairman and managing director, JSW Steel, told MiD DAY, "While banning exports of ore is welcome, it should be done in phases. If the government takes such a drastic step suddenly, these kind of problems will naturally arise."
JSW Steel is the largest consumer of iron ore with the demand of 11.9 mn tonnes. Others including Kalyani Group, Mukund Steels, BMM Ispat, and Kirloskar Ferrous Industries consume another 8.5 million tonnes.
Jindal hoped the local industry would expand to consume the entire supply in the near future with big players like ArcellorMittal, POSCO, and Tata having signed an MoU with the state government, during the Global Investors Meet last June to start their plants.
However, he suggested the government make the miners run value added steel plants mandatory. "In my opinion, no one should have a mining licence without owning a steel plant.
u00a0
This can be done with some political will. But looking at the prevailing problem, I suggest the state government allowing part of the ore in the stock for export this year," said Jindal. He added the export could be banned in phases for over five years now.
Brownie points?
However, going by the aggressive approach of chief minister B S Yeddyurappa to the issue, one can't hope for it. "The chief minister wants to gain political brownie points while settling scores against the Reddy brothers," said a senior minister in his cabinet. "I believe he may soften his stand."
In what looks like a second lap of the political battle between Yeddyurappa and the Reddys, the chief minister seems to have an upper hand though the mining lords have apparently not stopped scheming.
Allegations galore
With the piled up stock of ore posing a big problem, the Bellary Hospet Mine Owners Association has levelled a serious allegation against the steel plant owners saying that they were indulging in purchasing the ore at a cheaper rate and transporting it out from the state.
"Biggies like JSW Steel have steel plants outside the state and hence, have a chance of taking the ore out of state on the pretext of supplying it to their own plants," said Hothur Mohammed Iqbal, secretary of Bellary Hospet Mine Owners Association.
u00a0
"I demand auditing the ore with the steel plants, and then you will get to know how much of ore has been illegally purchased," he added.
Rubbishing the allegations, Jindal said, "We don't indulge in such activities. We are ready for any such auditing."
Iqbal was concerned about the mineworkers, once the business slows down.
"At least two lakh workers work in some 80 mines across the district. What will happen to them? Is it not the government's responsibility to protect their interest?" he asked.
Declining to soften his stand, Yeddyurappa told reporters on Sunday in Shimoga, "Mine owners have to look after their employees and I will not yield to such emotional arguments. There is no question of looking back on this issue."
102
Number of mining licences issued in the state
82
Number of functional mines
Demand & Supply
The Federation of Indian Mineral Industries reports the total amount of iron ore extracted in the state, until last March, is 49 million tonnes.
While the mines in Hospet and Sandoor yielded 35 mn tonnes, mines in Bellary produced 10 mn tonnes. Two million tonnes were extracted from the mines in Chitradurga and four million tonnes was produced in the mines in Tumkur and Chikkanayakana Halli.
JSW Steel is the largest consumer of iron ore with the demand of 11.9 mn tonnes. Others including Kalyani Group, Mukund Steels, BMM Ispat, and Kirloskar Ferrous Industries consume another 8.5 mn tonnes.
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