Chennai/ Bangalore:
The latest report of the Central Empowered Committee (CEC) to the Supreme Court recommending the closure of mining operations of 21 mining companies in Bellary-Hospet region is likely to have a far-reaching impact on the domestic steel industry.
The closure of these mines may result in a shortage of about 5-10 million tonnes of iron ore for domestic steel mills in south India.
The CEC, on July 4, recommended the suspension of mining operations by 21 companies. With this, mining will be halted by 29 companies. Last month, the CEC had recommended the closure of mines by six other companies.
However, the CEC is yet to complete its survey of 60 other mines and it has been granted additional time by the Supreme Court.
Once it completes the survey of all mines, it may recommend the closure of mining by many other companies, the sources said.
Out of about 150 operating mines in Karnataka, about 51 mines are already closed as a result of ban on exports. Of the remaining 99 mines, 27 mines have been asked to stop operations, leaving only 72 mines in the business. The mining industry estimates that finally only 40 mines may be left in the business, which means that the supply of iron ore to domestic steel mills will come down by about 5 million metric tonnes.
Presently, the mining companies in Karnataka supply about 25 million tonnes to domestic steel mills. “With the suspension of mining by 29 companies and assuming that the supreme court orders suspension of mining by a few other companies, the supply of iron ore to domestic steel mills will be affected severely. Already, exports from Karnataka have been stopped completely and the new development would be a big blow to the industry,” Basant Poddar, managing director, Mineral Enterprises Limited said.
He said as against the supply of an average 25 million tonnes iron ore to steel mills from Karnataka mines, the steel industry may expect about 15-20 million tonnes, which is about two-thirds of the demand. The demand from steel mills in south India is about 30 million tonnes annually.
Presently, in Karnataka alone, as many as 16 steel mills, including JSW Steels Limited, Kalyani Steels Ltd, Mukand Steels Ltd, Kirloskar Ferrous, VISL Bhadravathi, MSPL Ltd, BMM Ispat Ltd and Sathavahana Ispat among others source iron ore from Karnataka-based iron ore mines. Many other sponge iron manufacturers in Tamil Nadu and Goa also source iron ore from Karnataka.
“The operations of domestic steel mills will be severely affected with the shortage of iron ore from Karnataka as these mills cannot afford to shut down their furnaces,” industry sources said.
The total installed capacity of 16 steel mills in Karnataka is estimated to be 19 million tonnes per annum. Another 14 mills are in the pipeline and the total installed capacity would go up to 46 million tonnes.
The requirement of iron ore from all these mills is about 33 million tonnes.
The closure of these mines may result in a shortage of about 5-10 million tonnes of iron ore for domestic steel mills in south India.
The CEC, on July 4, recommended the suspension of mining operations by 21 companies. With this, mining will be halted by 29 companies. Last month, the CEC had recommended the closure of mines by six other companies.
However, the CEC is yet to complete its survey of 60 other mines and it has been granted additional time by the Supreme Court.
Once it completes the survey of all mines, it may recommend the closure of mining by many other companies, the sources said.
Out of about 150 operating mines in Karnataka, about 51 mines are already closed as a result of ban on exports. Of the remaining 99 mines, 27 mines have been asked to stop operations, leaving only 72 mines in the business. The mining industry estimates that finally only 40 mines may be left in the business, which means that the supply of iron ore to domestic steel mills will come down by about 5 million metric tonnes.
Presently, the mining companies in Karnataka supply about 25 million tonnes to domestic steel mills. “With the suspension of mining by 29 companies and assuming that the supreme court orders suspension of mining by a few other companies, the supply of iron ore to domestic steel mills will be affected severely. Already, exports from Karnataka have been stopped completely and the new development would be a big blow to the industry,” Basant Poddar, managing director, Mineral Enterprises Limited said.
He said as against the supply of an average 25 million tonnes iron ore to steel mills from Karnataka mines, the steel industry may expect about 15-20 million tonnes, which is about two-thirds of the demand. The demand from steel mills in south India is about 30 million tonnes annually.
Presently, in Karnataka alone, as many as 16 steel mills, including JSW Steels Limited, Kalyani Steels Ltd, Mukand Steels Ltd, Kirloskar Ferrous, VISL Bhadravathi, MSPL Ltd, BMM Ispat Ltd and Sathavahana Ispat among others source iron ore from Karnataka-based iron ore mines. Many other sponge iron manufacturers in Tamil Nadu and Goa also source iron ore from Karnataka.
“The operations of domestic steel mills will be severely affected with the shortage of iron ore from Karnataka as these mills cannot afford to shut down their furnaces,” industry sources said.
The total installed capacity of 16 steel mills in Karnataka is estimated to be 19 million tonnes per annum. Another 14 mills are in the pipeline and the total installed capacity would go up to 46 million tonnes.
The requirement of iron ore from all these mills is about 33 million tonnes.
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