The Hindu Business Line : Kudremukh mining closure unlikely to hit employees

KIOCL, with cash reserves of Rs 1,500 crore, saw no difficulty in undertaking its new investments to relocate part of its 1,300 employees and officials.

Bangalore , Dec. 26

WITH its investment proposals of Rs 1,500 crore for alternative sources of ore, Kudremukh Iron Ore Company Ltd (KIOCL) would face little difficulty in relocating its employees likely to be affected by the closure of mining activity in Kudremukh.The Supreme Court had given the verdict on petitions filed by NGOs and environment groups.

KIOCL envisages upgrading its infrastructure facilities at its Mangalore polarisation plant to receive four million tonnes of ore from Bellary-Hospet in the State so that exports of pellets do not stop.

In addition, the company has signed an MoU with SAIL and the Orissa Government, respectively, for jointly developing iron ore mines for its use with related facilities in that State.

The Mangalore plant, set up in 1987 as part of its early diversification into pellet production, contributed more than 70 per cent of KIOCL's turnover of Rs 1,853.7 crore in 2004-05.

KIOCL, with cash reserves of Rs 1,500 crore, saw no difficulty in undertaking its new investments to relocate part of its 1,300 employees and officials.

However, Mr P. Ganeshan, Chairman and Managing Director, said that a clear picture would emerge only after the company's petition seeking direction on mine closure plan along with a plea to be allowed to continue mining on small portion of land is decided. The petition will be heard in the third week of January.

KIOCL plans to spend Rs 200 crore to set up a railway siding at Mangalore for receiving ore for polarisation.

This is necessary as with the proposed closure of mining activity at Kudremukh, KIOCL would no longer be able to use the pipeline to transport the raw material to Mangalore.

However, the loss of Kudremukh as cheap source of ore would hit the company's earnings until its alternative plans take off. KIOCL had maintained a steady growth in its profits, which reached the peak of Rs 600 crore during 2004-05.

Even after the effective stoppage of the mining from next Saturday at Kudremukh, the company expects to take 3-4 years for the entire closure exercise to be completed, which included slope stability plan to restore the mined areas with greens and dismantling of the huge plant and machinery.