The Supreme Court’s decision to impose a blanket ban on mining operations in the district could badly impact the state’s steel industry which produces about 14 million tonnes of steel a year.
The mega-integrated steel plants, the sponge and pig iron mills and allied industries in Bellary, Koppal, Chitradurga and Tumkur fear they may have to shut down as they rely heavily on iron ore produced in Bellary which supplies as much as 40 million tonnes of the 49 million tonnes of iron ore produced by the state annually.
Besides the state’s 16 steel mills that include JSW Steels, Kalyani Steels, Mukand Steels, Kirloskar Ferrous, VISL Bhadravathi, MSPL and BMM Ispat, sponge iron manufacturers in Tamil Nadu and Goa also source iron ore from Karnataka. The requirement of iron ore of Karnataka’s steel mills is about 33 million tonnes and over 3 lakh people are directly dependent on them.
“The operation of domestic steel mills will be severely affected by the shortage of iron ore from Karnataka as they cannot afford to shut down their furnaces,” say industry sources.
The Karnataka State Iron and Steel Manufacturers’ Association says over `65,000 crores has been invested by steel makers, who pay the government `8,000 crores in taxes and duties. “Our members need to import 20 million tonnes of coal and the first quarter supply of steel to customers during 2011-12,” the association adds. The ban could impact the agreements signed by major steelmakers to invest in the state after the Global Investors’ Meet last year. Companies like Arcelor Mittal, Posco, Bhushan Steels, Essar Steels and NMDC are working to establish units here.
The Supreme Court was clearly not unaware of the problems the ban could create as the bench headed by Chief Justice S.H. Kapadia directed the ministry of environment and forests to submit an interim report on the iron ore requirement of the country’s steel industry and how much of it was met by the Bellary mines.