Iron Ore E-Auctioning: Another Worry to Indian Steel Producers

November13, 2011
By Rahul Jalan

Rahul Jalan, a Chennai-based senior research analyst in metals for Beroe, Inc. who tracks the global steel and rare earths supply chain and analyzes global procurement developments to help develop procurement solutions for the company. Beroe specializes in providing procurement intelligence for a broad swath of industries, enabling buyers’ decision-making.

India’s Supreme Court also recently allowed the e-auction of 1.5 million tons of ore every month to 400,000 tons every Wednesday (from the already-mined 25 million tons) to the steel mills within Karnataka. Of the 25 million tons, around 15 million tons may be in the category of higher-grade with 60%+ Fe content and the remaining 10 million tons of lower-grade, which cannot be consumed by the domestic steel industry.

These iron ore auctions don’t seem to be helping the domestic steel industry, as the buyers are not happy with the fixation of the iron ore base price and the exploitation of buyers who desperately need ore. The base price is fixed based on the prevailing prices in China and Japan, excluding export duty and transportation costs to ports.

The base price at the first e-auction process for high-grade iron ore (63% Fe content) was set at INR 3,700 (US $82) per ton (as against the market price of INR 3,500 (US $72) per ton) and it fetched up to INR 5,800 per ton at the auction — an appreciation of about 50 percent. The base price for iron ore fines at the e-auction was set at INR 2,700 (US $56) per ton. The difference in the prices of high-grade iron ore to low-grade was at INR 1,470 (US $30) for a difference of 6 percent for every percent fall in Fe. However, the recently concluded e-auction process provided a discount of only INR 162 (US $3.37) for a 6.1 percent fall in Fe.

Moreover, the auctioned iron ore price is not inclusive of royalty and taxes. The steelmakers have to pay an additional cost of 10 percent royalty and 12 percent forest development tax (FDT) to the state government on the final auctioned price. The final landed cost of the auctioned iron ore has severely increased the raw material price.

(sourced Metal Miner)

Sponge iron industries facing worst ever crisis

Monday,Oct31,2011

By Mazhar AliMazhar Ali, TNN

CHANDRAPUR: The sponge iron industry in district is facing its worst ever raw material crises thanks restriction imposed on outflow of iron ore from Karnataka and Odisha. While dried up iron ore supply has forced couple of sponge iron plants to shut their production, others are running their units at less than half of their capacity.

It is almost three months these industries are facing the heat of raw material crises and if the trend continues they could be forced to lay off workers rendering hundreds of workers jobless. The crisis has also adversely affected the work of couple of upcoming sponge iron units in Mul tehsil.

Sponge iron industries are comparatively low cost industries and are established at places where its raw material, coal and iron ore, is readily available In Maharashtra the cluster of sponge iron industries has come up in Chandrapur, a coal abundant area, however the poor mineral policy of state in relation to these industries has pushed them into grave difficulty.

There are seven sponge iron units in Chandrapur district. Gupta Metalics Ltd located at Chunala in Rajura tehsil closed its unit permanently, while other six are reeling under grave raw material crisis.

"Irregularities busted in iron ore mines in Karnataka and Odisha has led to this situation. Both the states were main iron ore suppliers to the sponge iron industries in Maharashtra. But, since both have banned the transport of iron ore out of the state, our raw material supply has been stranded, leading to heavy cut-down in the production," said vice-president, Chaman Metalics, SK Sharma. Chaman Metalics has shut down its operations since some weeks.

He claimed that sponge-iron industries came to Chandrpaur as coal, one of the two raw materials they need, is readily available here. Iron ore mines in Hospate and Billari in Karnataka were main source of iron ore for industries here. "It is liability of state government to ensure availability of iron ore, the other raw material we needed. There are huge deposits of iron ore in Surjagarh in Gadchiroli and industries have obtained mining blocks there, thanks to Naxal hurdle none have dared to start mining of the mineral," Sharma said. He maintained that government should resolve Naxal problem and pave the way for iron ore mining in Gadchiroli district.

President of Chandrapur MIDC Industries Association Madhusudan Rungta informed that raw material crisis has led to direct loss of government revenue of Rs 12 crores per month obtained against excise duty from sponge iron units here. In addition to this there is a loss of revenue of Rs 6 crore per month against the sales tax from these units. "While there is loss of government revenue, the continuation of crisis could lead to employment problem. Sponge iron units incurring heavy losses could resort laying off employees and hundreds of workers would be rendered jobless," he said.

Keyword: sponge iron industry|raw material|Hospate and Billari

sourced TOI

Iron ore exports under-invoiced

Sat,29 Oct, 2011

NELLORE: The CBI team that investigated iron ore exports by the Obulapuram Mining Company owned by Gali Janardhan Reddy through the Krishnapatnam port has reportedly found several irregularities.

According to sources, it found that 2,000 trucks ferried ore from Obulapuram in Anantapur district to the port in Nellore district daily, each carrying 40-55 tonnes of ore as against the permitted load of 15 tonnes.

However, CBI officials were tight-lipped on how many companies were involved in iron ore export from Krishnapatnam between 2007 and 2009 and what OMC’s share was. They simply said investigation was complete and a charge sheet would be filed in a day or two. It is learnt that the CBI found that 42 lakh tonnes of ore was exported from the port by 80 companies since 2007 but only 14 lakh tonnes was recorded.

It seized some crucial documents during its visit to the customs office after questioning its assistant commissioner K Ranga Rao on Thursday.

Not satisfied with the answers given by the port authorities, the CBI has issued notices seeking a written reply.

CBI joint director V V Lakshminarayana met SP BV Ramana Kumar Thursday and discussed road accidents involving iron ore trucks on the national highway from Kadirinaidupalle in Marripadu to the port that lies in the district.

As per police records, 200 people died and 500 were maimed in 350 accidents involving iron ore lorries during 2007-09.

sourced IBN Live.in

CBI focuses on iron ore exports by J Reddy

Hyderabad, October 27, 2011

The Central Bureau of Investigation (CBI), probing illegal mining by former Karnataka minister Gali Janardhana Reddy, is now focusing its attention on the export of iron ore by the mining baron.

A team of CBI officials led by Joint Director VV Lakshminarayana Thursday reached Nellore
district and began the probe at Krishnapatnam port, from where the maximum quantity of iron ore was exported by Obulapuram Mining Company (OMC) owned by Janardhana Reddy.

"Iron ore was exported from various ports and the maximum percentage was from Krishnapatnam port. We want to know how much was exported from here and what procedures the port authorities followed," Lakshminarayana told reporters.

The federal agency will also gather information from customs officials with regard to exports from the private port.

"The port authorities had already sent some documents to us. We have examined them and have come here as part of the investigations," he said.

According to the Karnataka Lokayukta report, the maximum export of illegal iron ore took place from Krishnapatnam port. Out of the total iron ore exports of 3,31,04,866 tonnes from seven ports since 2006-07, Krishnapatnam accounted for 1,11,70,994 tonnes.

Lakshminarayana, who is also leading the investigations into alleged illegal assets of MP Y.S. Jaganmohan Reddy, said their main concentration was on illegal mining as the arrests had been made in the case and "we have to soon file the charge sheet".

Janardhana Reddy and his brother-in-law and OMC managing director B.V. Srinivasa Reddy are currently lodged in Chanchalguda Central Jail here.

The CBI arrested the duo from Bellary in Karnataka Sep 5 in connection with illegal mining in Andhra Pradesh's Anantapur district bordering Karnataka. The probe was ordered by the Andhra Pradesh government in 2009.

The Supreme Court last month ordered the CBI probe into illegal mining in Karnataka.

(sourced Hindustan Times)

Bellary, CBI officials continue raids targeting mining areas

Saturday, Oct 15, 2011

CBI officials continued their raids targeting mining areas of Bellary on Friday.

They reached Bellary at midnight on Thursday and began their operations from 9am after reaching Sandur taluk.

Earlier, raids were first conducted on Deccan Mining Syndicate (DMS) which is said to be involved in illegal mining that was carried out by Associated Mining Company (AMC) belonging to G Aruna Lakshmi, wife of former minister G Janardhana Reddy.

The 15-member team was headed by DIG and CBI, Hyderabad. The raids were conducted on the leased mining areas of DMS. This is the second such raid by CBI officials on DMS property.

The officials came armed with documents to prove DMS had occupied about 42 hectares illegally without getting any lease grants. AMC occupied 10 hectares without proper grants.

Tahsildar KB Shivakumar, range forest officer Gopal, mines and geology department official Shankar, ACF officer Venkatesh and others provided relevant information on illegal occupation to CBI officials.

The officials then visited NMDC and collected details of irregularities alleged committed by AMC.

The raids followed a Supreme Court order to investigate the irregularities that were committed by G Janardhan Reddy and others associated with AMC and OMC. CBI officials also conducted raids on a couple of close aides of Reddy in Bellary, Hospet, Toranagallu and DMS.

According to a CBI official source, first information report was prepared on 134 persons after the Supreme Court passed an order to register cases against Associated Mining Company (AMC) and DMS.

In the meantime, former Lokayukta justice N Santosh Hegde hailed the raids by CBI officials from Andhra Pradesh. They were able to arrest G Janardhana Reddy for his involvement in illegal mining.

Although CBI officials based in Karnataka had conducted raids a couple of times, nothing came out of that. Instead of raids, action should be initiated, Hegde said.

(sourced DNA)

NMDC iron ore reserves set to be 2 billion tonnes

Wednesday, 28 Sep 2011

BS reported that NMDC Limited, the public sector mining major, has opened a new mine the Kumaraswamy Iron Ore Mine in Bellary district to increase its iron ore reserves. This comes in view of the depleting reserves in its Donimalai mines in the district. Simultaneously, the company is also exploring new mines in the state.

Mr Rana Som chairman and managing director, NMDC Limited said “With further geological exploration, additional mineral resources of 20 million tonne in Donimalai iron ore mine is anticipated to extend the present life of Donimalai mine by another 4 to 5 years. Considering this, it is now proposed to operate two mines in the Bellary Hospet sector, Donimalai and Kumaraswamy Iron Ore Mines. With this, the iron ore availability from the Bellary-Hospet sector would also drastically improve.”

In his address to the shareholders at the 53rd annual general meeting, Mr Som said the new exploration has yielded positive result for the company over the last year.

He said “The company biggest strength has been in its possessing large reserves of high grade iron ore at its existing mines at Bailadila and Donimalai. The company has been consistently active in carrying out planned exploration works in its existing mines.”

He added that the new exploration studies have indicated additional reserves of 111 million tonnes of iron ore in the Bailadila sector alone. Considering the geological continuity of ore deposits, it is expected that additional occurrence of 611 million tonne iron ore reserves could be established.

Mr Som said the company has also embarked on ensuring ‘zero-waste mining’ in its mines. It is now proposed that BHJ and BHQ ore could also be valuably beneficiated to produce around 64% to 65% Fe grade iron ore. The company proposes to set up a plant to process this ore at Donimalai.

For the year 2010-11, NMDC achieved production of 25.15 million tonnes of iron ore as against 23.80 million tonnes, showing a growth of 5.6% over the previous year.

(sourced from Business Standard)

Report exposes ILC Industries role

Monday, 29 Aug 2011

DHNS reported that Lokayukta investigation into illegal mining has exposed illegal activities of Bangalore based iron ore export firm, ILC Industries Ltd, which exported illegally extracted ore worth about INR 1,300 crore in four years.

According to the U V Singh report, of which Deccan Herald got a copy under the Right to Information Act on Saturday, ILC exported about 4,330,200 tonnes of iron ore between 2006 and July 2010. Of this, only 1,161,014 tonnes had valid permits. The rest 3,169,186 tonnes are illegal and their approximate value is a whopping INR 1,300 crore.

Obulapuram Mining Company owned by the Bellary Reddy brothers Mr Janardhana Reddy and Mr Karunakara Reddy and their associate Mr Sriramulu, is one of the 21 companies that supplied illegally extracted iron ore to ILC. About 70% of the company's exports are from Krishnapatnam (50%) and Belekeri ports (20%).

The company was also found to have paid about INR 10 crore as risk amount (the code name for bribe to ensure safe transportation to the destination) to the key operators of the mining mafia - Karapudi Mahesh, Swastik Nagaraj and Dada Peer.

The company had transported about 640,517 tonnes of illegal iron ore to Belekeri port alone between October 2009 and May 2010. Of this, 309,963 tonnes were found to have been transported from SB Minerals, Trident Minerals and Shanthalakshmi Jayaram Mines, the report stated and added that the source of the remaining quantity needs to be investigated. It was during this period, theft of large quantity of iron ore at Belekeri port was reported.

The investigation team, which had seized some documents from the company during the probe, has come across a spreadsheet that showed "commitments and movements" (a schedule of illegal ore to be supplied by mining companies to ILC and their mode of transportation)

Firms having link with ILC
Ananthpur Mining Corporation
Obulapuram Mining Company
Bachhawat Enterprise Pvt Ltd
BBM Ispat Ltd
Dream Logistic India Pvt Ltd
Shree Lakshmi Venkateshwara Minerals
Shree Mallikarjun Shipping Pvt Ltd
Shree Ganesh Minerals
SVK Minerals
Swastik Steel
Tessar Trading Corporation
Madhusree Enterprises
Swastik Steel Hospet Pvt Ltd
SB Logistics
Devi Enterprises
Shafia Minerals
Lakshmi Aruna Minerals
Sree Jambinathaneshwara
Siddeshwara Traders
Vyshnavi Minerals
Daksh Minerals

(Sourced from DHNS)

India's Sesa Goa says mining ban to hit performance

MUMBAI (Reuters) - India's Sesa Goa Ltd , owned by London-listed Vedanta Plc , said on Saturday its performance would be affected by an order from the country's top court extending a ban on mining to two more districts of a key iron ore producing state.

The Supreme Court on Friday extended the ban to Tumkur and Chitradurga districts of the southern Indian state Karnataka, Anita Shenoy, counsel for the Karnataka state government, told Reuters.

The two districts account for about seven percent of India's estimated 213 million tonnes of annual iron ore output, and the ban could hit exports from the world's third-largest supplier of the steel-making material.

Sesa Goa said in a statement the mining activities at the company's Chitradurga mine would have to be stopped with immediate effect as a result of the court order and that would "adversely affect" the performance of the company.

(sourced Reuters)

NMDC to ramp up production in Bellary

Saturday, 27 Aug 2011

Country's top miner NMDC is in the process of ramping up its production from its Karnataka's facility in Bellary to one million tonnes a month, Mr PK Misra steel secretary said that “I think we should be able to stabilise things soon. In a month's time things will stabilise for the steel sector. NMDC will ramp up its production capacity to one million tones.”

Mr Misra on the sidelines of a CII conference on steel told reporters that the steel and allied industries in the South are now reeling under severe shortages of iron ore, a vital raw material for production.

The issue has come up, following a July 29 ban by the Supreme Court on mining activities in the Bellary district in Karnataka due to environmental degradation of the area.

This led to a severe shortage of iron ore in the South as Bellary accounts for about 80 per cent of Karnataka's total production at about 40 million tonnes annually.

The steel and allied industries had maintained that the partial relief provided by the apex court on August 5, allowing NMDC to mine one million tonnes of ore a month, would not help as the demand was much more.

In a statement here, the Bangalore Chamber of Industry and Commerce said iron ore demand of steel and allied industries in Karnataka alone was 2.9 million tonnes a month, while NMDC had been allowed to mine only one million tonnes.

The chamber also said NMDC had been supplying only in the range of 21,000 to 22,000 tonnes a day against the estimated daily production of 33,500 tonnes, to fulfill the criteria of producing one million tonnes a month, as has been ordered by the apex court. Mr Misra said NMDC had also started supplying from Chhattisgarh to meet the shortfall, while some industries were buying from Goa to run their plants.

(sourced from Hindu)

SC extends mining ban in Karnataka

Saturday, 27 Aug 2011

Following a report of the centrally empowered committee of the court, India’s Supreme Court on Friday has finally suspended iron ore mining in the Tumkur and Chitradurga districts of Karnataka.

The forest bench headed by Chief Justice SH Kapadia said the fundamental right to life, which includes a clean environment, was above the right to trade in the Constitution. CJ stressed that economic development should be balanced by environmental considerations. He asked the industries to work out a rehabilitation plan and a scientific method to excavate the mines.

However, it asked for suggestions from the Attorney General and others to submit a formula to release 25 million tonnes of iron ore available for immediate use by the steel industry.

The court further directed a joint team to carry out a survey and demarcate the boundaries of the leases, as was ordered in the case of Bellary district earlier. The empowered committee will name the agency in charge of keeping the accounts of sales and royalty payable at the rate of 10 per cent of the market price.

Friday’s order followed the August 19 report of the empowered committee, which stated reckless mining in an unsustainable manner for short-term gains had affected the region’s ecology.

(sourced from BS)

Sesa Goa hits 52-week low on a likely mining ban in Chitradurga, Tumkur

Mon,Aug 22, 2011

Sesa Goa slipped 4.85% at Rs. 211.75 at 11:03 IST on BSE on reports a panel appointed by the Supreme Court has recommended a ban on mining in iron ore-rich areas of Tumkur and Chitradurga in Karnataka.

Meanwhile, the BSE Sensex was down 31.10 points, or 0.19%, to 16,105.82.

On BSE, 2.59 lakh shares were traded in the counter as against an average daily volume of 4.08 lakh shares in the past one quarter.

The stock hit a low of Rs. 209.60 so far during the day, which is also a 52-week low for the counter. The stock hit a high of Rs. 215 so far during the day. The stock had hit a 52-week high of Rs. 383.50 on 15 October 2010.

The stock had underperformed the market over the past one month until 19 August 2011, sliding 23.29% compared with the Sensex's 13.47% fall. The scrip had also underperformed the market in past one quarter, tumbling 24.81% as against 11.02% decline in the Sensex.

India's largest private sector iron ore exporter has an equity capital of Rs. 86.91 crore. Face value per share is Re 1.

According to reports, the Supreme Court's environment panel, Central Empowered Committee (CEC), on Friday, 19 August 2011, concurred with the Karnataka Lokayukta to report rampant illegal iron ore mining in Chitradurga and Tumkur districts and recommended a complete ban on private mining.

Sesa Goa has a mine is Chitradurga. Earlier this month, Sesa Goa's managing director, PK Mukherjee was quoted by the media as saying that the company is targeting six million tonne per annum (MTPA) of iron ore production from Karnataka in the current year.

Submitting the CEC's report to a bench of Chief Justice S H Kapadia and Justices Aftab Alam and Swatanter Kumar, adviser A D N Rao reportedly said the adverse impact on environment in Chitradurga and Tumkur districts was identical to the one witnessed in Bellary and advocated controlled mining as had been ordered by the apex court in Bellary.

On 29 July 2011, the apex Court had suspended all mining activities in Bellary district of Karnataka, observing that extraction of iron ore would not be allowed at the cost of environment degradation.

Reports suggest that the court has issued notice to the Karnataka government and sought its response within a week to the CEC's recommendation that mining activity be completely banned in Chitradurga and Tumkur districts before putting in place an interim arrangement on the lines of the one in Bellary district, where mining is done by public sector undertakings meant to meet the requirement of the domestic steel industry.

Sesa Goa's consolidated net profit slumped 35.4% to Rs. 840.59 crore on 12.5% fall in net sales to Rs. 2094.74 crore in Q1 June 2011 over Q1 June 2010.

Sesa Goa is India's largest producer and exporter of iron ore in the private sector and is on course to be in the league of top four iron ore producing companies in the world. Apart from iron ore it also produces pig iron and metallurgical coke.

No plan to ban iron ore exports from India - Mr Sharma

Sunday, 21 Aug 2011

PTI reported that Indian union minister for commerce and industry Mr Anand Sharma ruled out a ban on iron ore exports, saying the surplus mineral must be exported.

Mr Anand said that "A considered view had been taken that the exports of iron ore must continue. India has enough surplus particularly of iron ore fines.”

He added that domestic industry largely uses iron ore lumps, while the country exports mainly iron ore fines.

Mr Sharma said that "Therefore, mined iron ore which is in surplus must be exported.”

The issues had arisen following an apex court order of late last month, banning on all mining activities in Bellary in Karnataka. The apex court in its subsequent hearing later on August 5 partially lifted the ban and allowed only state run NMDC to carry out mining activities in the region with a cap of 1 million tonnes per month. The apex court had also said that iron ore produced from the Bellary region will not be exported.

Mr Sharma said that "This particular intervention by Supreme Court was on a limited context on what was happening, particularly in the state of Karnataka in Bellary, where there was illegal mining of iron ore. Illegal mining is taking place in some other parts of the country as well, but that does not lead to a situation where that iron ore does not get exported. This issue will get suitably resolved.”

(Sourced from PTI)

Mine close hits foundry sector

Friday, 19 Aug 2011

BS reported that the closure of mines in Karnataka’s Bellary-Hospet region has started hitting the downstream sector. Around 5,000 foundry units and a similar number in the sponge and pig iron sector have been facing a big shortage of iron ore supply. The foundry sector makes key equipment for the auto and engineering industries.

Following a Supreme Court order about two months earlier, private mining of iron ore in Karnataka has been suspended. Downstream sectors such as foundries are, therefore, facing a big shortage of supply of quality pig iron, the key raw material for all major auto and engineering grade foundries. The frequent rise in interest rates by banks is another problem for the foundry sector.

Bellary-Hospet is known for high-grade iron ore, not available in abundance elsewhere in the country. Karnataka produces nearly 30% of India’s yearly output of 220 million tonnes of iron ore.

Mr AK Anand director of The Institute of Indian Foundrymen said that “Steel and other metallurgical industries are severely affected.”

Mr C Nagarajan a National Council member of IIF said that “Foundry units are facing problems from both sides lower realization and high cost of production due to a dramatic spurt in interest rates for their working capital.”

Interest rates have risen by 4% in the past six months and raw material prices by 15 to 20%.

According an estimate, about 500 small and independent sponge iron units, largely in Chhattisgarh, Gujarat, Tamil Nadu and West Bengal, are facing a closure threat due to non availability of ore.

The shortage of ore has already started begun impacting steel and other downstream producers. Sponge iron prices first shot up to INR 24 a kg when the mining ban in Bellary-Hospet was announced. It then cooled, to the current INR 22 a kg.

Mr Amitabh Mudgal vice president of Monnet Ispat said that “The sponge iron industry is currently breaking even. Any rise in raw material prices from here will turn the returns negative.”

Mr Anand further said that an estimated 32 million tonnes of good quality ore is annually required to meet the need of industry, of which 3.5 to 4 million tonne is for feeding the foundry industry for production of pig iron. Currently, iron ore mining in Bellary-Hospet is restricted to the public sector NMDC, whose capacity is inadequate to meet the foundry industry need.

(Sourced from BS)

Bellary mining ban hits Indian Railways earnings

Wednesday, 17 Aug 2011

BS reported that Indian Railway earnings will take a hit of about INR 600 crore in the wake of Supreme Court’s decision to suspend mining operations in Bellary.

The railways have already scaled down its budgeted target for 115 million tonnes iron ore loading in 2011-12 by 3.43 million tonnes. The current potential would have to be further scaled down by approximately 10 million tonnes.

A senior ministry official said that the iron ore movement was earlier expected to bring in INR 9,035.31 crore during 2011-12, forming almost 13% of the overall budgeted freight target of INR 68,620 crore.

According to senior officials in the Railway Board, iron ore loading from Bellary declined 30% to around 16 million tonnes in 2010-11 from 23 million tonnes in 2009-10. Iron ore from the region, in fact, constituted 17% of the total iron ore loading in 2009-10 but fell to almost 13% in 2010-11. This year from April to June, only 3.25 million tonnes iron ore was loaded from the area.

Efforts will be made to load all other commodities to compensate for the shortfall, according to senior officials in the Railway Board. The district of Bellary produces about 35 million tonnes of iron ore annually, about 83% of Karnataka’s total annual production of 42 million tonnes.

Owing to ban on iron ore exports from Karnataka in 2010, there has been a loss of INR 1,071.45 crore to the Indian Railways. The earnings from iron ore exports in Karnataka plunged from INR 1,770.59 crore in 2009-10 to INR 699.14 crore in 2010-11.

According to a Comptroller and Auditor General report, “The annual growth rate of loading in the past decade consistently showed an upward trend till 2005-06 after which, there was a decline.”

(sourced BS)

Blood and Iron' in Bellary: A shocking tale

Thu,Aug 11, 2011

New Delhi:
Documentary Film: "Blood and Iron";
Director: Paranjoy Guha Thakurta;
Rating:****

"Scandals like 2G, CWG, etc, lead to a notional loss of money. When you consider illegal mining, there's no comparison because that is the loss of a non-renewable resource that can never be got back," Paranjoy Guha Thakurta thus explains why he made his film, "Blood and Iron", on illegal iron ore mining in Bellary rather than, say, on other scams that have captured the nation's imagination.

Even the conservative statistics are staggering - 500,000 tonnes of iron ore stolen, leading to a loss of Rs.5,000 crore to the nation (a more real estimate is 10 times this sum). Where did the money go? According to the film, into the coffers of the three Galli brothers - Galli Janardhana Reddy, Galli Karunakara Reddy and Galli Somashekara Reddy -, their associates and the two largest political parties in the nation, the BJP and Congress.

Is it any wonder that right at the beginning of this bold 96-minute documentary a person puts the loot into perspective, saying, "It is the biggest scandal of independent India" while another declares, "The way these guys loot the country makes Nader Shah and Ghaznavids look like pickpockets."

And yet the Galli brothers were holding ministerial berths in the state legislature until recently. Adding a sense of irony, the film shows G. Janardhana Reddy claiming innocence and stating all the people merely act out our destiny. Convenient reasoning indeed for a man who has broken almost every law in India and has literally moved state borders to his convenience.

According to Guha Thakurta, the film is about the tripartite confluence of crime, business and politics in southern India. You can add another - religion. For two reasons - one, that it is the BJP that has supported the Galli brothers and, two, that the brothers have 'donated' a 30-kg gold crown studded with a stunning emerald of 816 carats and 35,554 diamonds to Tirupati. The crown of the lord of Tirupati is thus washed in blood and iron.

This looting of the iron is not just the BJP's doing. In adjoining Andhra Pradesh, it is the Congress party that provides them patronage. "Blood and Iron" thus gives ample proof that politicians really have no party and that the only undisputed fact about them is that they are corrupt.

The greatest strength of the film is that inside 90 minutes it manages to dig into all the angles to this greatest pilferage of India's resource, including the environmental one. The visuals of once green mountains now ripped red, an impoverished dog on red soil and a white cow bathing in a brick red river make you feel as if the hills have been skinned alive and mother earth's blood is flowing through its red streams.

Guha Thakurta uses his three and a half decades of journalistic experience to interview a cross section of people - judges, journalists, activist, writers, singers and the common man - and paints a picture of a nation in decline, of mother India being raped by her own sons.

Weaving music and protest songs into the narrative, the film gives a complete ringside view of the truth behind the greatest loot of the nation.

Guha Thakurta says, "Bellary has become a synonym for everything wrong with Indian democracy."

JSW Steel applauds Supreme Court order

Tuesday, 09 Aug 2011

JSW release said that “It is heartening to note that the Honourable Supreme Court of India in its order dated August 5th 2011 permitted NMDC to mine one million tonnes of iron ore per month from its two mines commencing from August 6th 2011.”

It was further clarified in the said order that no part of this production shall be exported. It shall be sold to the domestic industry in consultation with ministry of steel, government of India. Further directions to submit macro level EIA study by Indian Council of Forestry Research and Education and reclamation and rehabilitation plan in Bellary district by State of Karnataka in a time bound manner (3 months) are quite encouraging for achieving sustainable economic development.

JSW Steel applauds this timely relief ordered by the Honourable Supreme Court of India when the steel industry in the region was at the brink of closure of steel plants due to non availability of iron ore caused due to suspension order dated July 29th2011. This relief not only provides breather to the steel industry in the region but also assists in continuation of employment and livelihood for people employed in this sector.

Even though the ruling is not expected to ease the situation for the steel companies in the region to operate the plants at full capacity since the requirement of iron ore is much higher than what is currently allowed, the company understands and appreciates the balancing act of the Honorable court between the environmental concerns and economic development.

The current production of iron ore in the rest of Karnataka is 7 to 8 million tonnes per annum. The total availability of iron ore in the State of Karnataka will be only 19 to 20 million tonnes including the proposed 12 million tonnes from NMDC in Bellary district against the industry requirement of 33million tonnes thus meeting only 60% of requirement.

JSW Steel is the leading integrated steel producer in India with steel making capacities of 10 million and 1 million tonnes located at Vijayanagar in Karnataka and Salem in Tamilnadu respectively. The requirement of iron ore to operate both these units at full capacity will be 18 million tonnes of ore with fe content of 63%.

In view of the partial relief granted by the Honorable court, JSW Steel plans to operate its plants at present at around 80% capacity with an expectation of further relief in the availability of ore from the Honorable Supreme Court of India to enhance the capacity utilization beyond 80%.

Highlights:

1. Will safeguard direct and indirect employment in the steel industry of the region

2. JSW Steel plans to operate its plants at around 80% capacity though ruling is not expected to ease the situation for the steel makers to operate at full capacity

3. Requirement of iron ore to operate these units in JSW Steel plants at full capacity will be 18 million tonnes

4. Proposed 12 million tonnes from NMDC in Bellary district against the industry requirement of 33 million tonnes thus meeting only 60%.

5. Expects further relief to operate these plants beyond 80% in the availability of ore from the Supreme Court

Centre may plead against mining ban

Thursday 04 Aug, 2011

The Indian central government is likely to appeal against the blanket ban on iron ore mining in Bellary in Karnataka before the Supreme Court.

An inter ministerial meeting attended by secretaries in the environment and steel ministries on Tuesday felt that instead of a blanket ban, only the erring companies should be dealt with.

The Centre will present its interim report this week. The report was to be prepared in consultation with other concerned ministries like mines, steel and commerce. While imposing blanket ban on iron ore mining in Bellary last week, the apex court had asked the environment ministry to come out with an interim report by Friday on requirement of the iron ore for the domestic steel industry.

A mines ministry official said that the government will present a fact sheet at the next hearing on Friday, where-in it would argue that a blanket ban would lead to closure of several steel mills, including those in the SME sectors, in the area.

The official said that “Cost of transporting iron ore will be too much for the smaller players Kalyani Steel, Mukund Steel and Kirloskar Ferrous. Karnataka has 16 steel companies of different scales and minus JSW Steel, no one can survive if the ban continues for more than 15 days. Moreover, there will be a question mark on JSW sustaining the regular production levels, if the bans continues beyond Friday.”

(sourced Deccanherald)

TATA Metaliks may close Goa plant

Wednesday, 03 Aug 2011 | By PTI

PTI reported that as a direct fall out of the iron ore mining scam in Karnataka, pig iron manufacturer TATA Metaliks Limited might have to close down its Goa plant in a week.

Mr Harsh Jha MD of TATA Metaliks a subsidiary of TATA Steel told PTI that "The iron ore supplies to the Goa plant are halted due to the Supreme Court ban on mining in Karnataka. We may have to close down the plant in a week.”

Mr Jha said the Goa plant depended on iron ore supplies from the Bellary Hospet belt in Karnataka.

He added that "Closure of the Goa plant will entail a huge revenue loss for the company.”

He said the Goa plant was contributing INR 500 crore out of TATA Metaliks' annual revenue of around INR 1,300 crore.

The Goa plant has a capacity of 200,000 tonne per annum.

The company was also in the process of acquiring 1,900 acre in Karnataka for its 3 million tonne steel plant. Mr Jha said the company was in the process of obtaining consent of the people for acquiring 75% and the balance would be acquired by the Karnataka government.

Update on mis happenings in Bellary

Monday, 01 Aug 2011 |By TOI

Karnataka chief minister Mr BS Yeduyurappa can blame his downfall on the windfall reaped by mining companies owned by the Reddys, their associates and partners in Bellary accounting for a whopping 35% of the total iron ore mined in 2008-09 in the district.

The Supreme Court's environmental panel Central Empowered Committee gave lessee wise details of iron ore production during 2008-09 and contrasted it with 2002-03 before a bench, headed by Chief Justice SH Kapadia to show the manifold increase in mining activity.

The production of iron ore by 124 mine lease-holders from 7,646 hectares in 2002-03 was 16.01 million tonnes, which almost tripled to 44.38 million tonnes in 2008-09.

With Reddy brothers as ministers in Karnataka, their firms, friends, associates and partners prospered by indulging in either over extraction or illegal mining to account for 15.796 million tonnes of iron ore in 2008-09, which is more than 35% of the total iron ore mined from the entire district.

The CEC report authored by member secretary MK Jiwrajka and presented to the court through amicus curiae ADN Rao, listed Bellary's Zeenath Transport Company as the highest extractor of the mineral.

Zeenath Transport Company, which is giving a share of the profit to a mining company owned by the Reddys and their relatives, extracted 6.141 million tonnes of iron ore in 2008-09 that was nearly 40% of the 157.96 tonnes extracted by 22 mining companies linked to the Bellary mining barons.

Amicus curiae and senior advocate Shyam Divan showed photographs of Bellary forests being devastated by mining activities relating to Bharath Mines and Minerals, VS Lad and Sons, Associated Mining Company, S B Minerals, Shantalakshmi Jayaram, Chowgule & Co Private Ltd, Aswathnarayan Singh & Co, Auro Minerals, Ramgad Mines and Minerals Pvt Ltd, HG Ranganagoud, Zeenath Transport Co.

Divan said the activity had been going on in connivance of everyone district administration, transport authorities, environment and mining departments as all the mine lease holders have dumped the overburden (the extracted earth) on the hill slopes destroying the forests.

Indian iron ore mining mess - Administration seizes iron ore in Bellary

Monday, 01 Aug 2011| By PTI

PTI reported that continuing its crackdown on illegal transport of iron ore after the Supreme Court ordered suspension of mining operations in the Bellary district, the district administration has seized several consignments of iron ore being transported illegally in the state.

On Saturday, the administration seized 49 trucks illegally transporting iron ore at Alighar on the city outskirts. The district collector said the vehicles apparently belong to Bellary Mining Corporation. He said the truck drivers claimed to have obtained the permit for taking out the iron ore on July 30.

On Sunday the administration seized more consignments. Official sources said personnel from the Revenue and Mines and Geology Department seized iron ore being illegally transported in 24 lorries in Sandur taluk, which belonged to Tomatro Mining company. The company was transporting the ore to Janaki Steels.

Another consignment of the company's 3,800 tonnes, being transported in railway wagons was also seized.

Authorities also seized 3,960 tonnes of iron ore, which was being transported from Mysore Minerals in Sandur to Jindal company in railway wagons and lorries.

On July 29, the Supreme Court had ordered immediate suspension of mining and transportation of iron ore from Bellary district. The court passed the order by taking note of the report of its expert panel, Central Empowered Committee, which said most miners in the region were indulging in illegal mining, causing considerable environmental damage.