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Relief seems to be in sight for steel companies with iron ore mines in Karnataka restarting operations after a ban of nearly 17 months.
Though the Supreme Court lifted the ban on 18 A-grade mines at Chitradurga, Bellary and Tumkur districts in September, the process of securing approvals had delayed the restart of operations.
Unable to afford iron ore as prices rose, many small secondary steel producers and pellet manufacturers have shut shop in the State. Large steel companies have cut production. They are not able to pass on the rising cost due to lower steel demand. Iron ore supply was down due to the restrictions on mining in Goa and Odisha.
MSPL Ltd Executive Director Shrenik N. Baldota said the company would start operations in two months and targeted to mine about a million tonne by the end of this fiscal. Five or six mines are to start production this month, he said.
CHALLENGING TIMES
MSPL’s Vyasanakere Iron Ore Mine is one of the largest private sector mines in the Bellary-Hospet region of the State. The mine extends over 347 hectares. The company has been in the mining business for the past 50 years. Karnataka contributed about 40 million tonnes a year (mtpa) of the country’s total iron ore requirement of 200 mtpa.
MSPL produced about 5 mtpa valued at about Rs 4,000 crore. The company had to stop mining a year before the ban was imposed by the apex court, due to a bribe demand from local goons.
“We were very clear that we would not do business by bribing anyone. So, we stopped our operations,” said Baldota.
The mining ban might have hit the industry, but it has wiped out all the bad elements from the business and in the long run, it is good for every one, he added.
Despite going out of business, MSPL has managed to foot the wage bill of its 3,000-strong workforce.
“We did not sack even a single worker, because we knew that they do not have other employment opportunity, as the entire mining sector was hit in Karnataka, he said.
Though revenue from other ancillary business was supporting the financial needs of the company, it had to resort to huge borrowings. Getting regular finance from the banks was quite challenging, but things are to fall in place soon, said Baldota.
> suresh.iyengar@thehindu.co.in
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