Economy

A lakh left in the lurch in Bellary as mining stops

Anil Urs Bellary | Updated on May 10, 2011 Published on May 10, 2011

Barren Prospects: A mining area near Hospet in Bellary. People depending on mining are finding the going tough after the ban. — Photo: K. Murali Kumar   -  Business Line

The halt of iron ore mining in Karnataka, particularly Bellary, has left around a lakh people in the lurch. Mining activities in the region has been stopped for more than six months now. Around 20,000 people were directly employed and 80,000 were indirectly employed by the mining activities, according to the Mines Safety Association of Karnataka. The sector provided in-direct employment in the form of transporters, drivers, cleaners and so on. The dependents and family members of such people are around 3 lakh.

Major companies are members of the Mines Safety Association of Karnataka.



The ban on iron ore mining and its exports is likely to alter the economic profile of Bellary district. Now the future of mining and the jobs depends on the State Government, which has come under the Supreme Court's scanner.

“At the end of six months, the socio-economic change is clearly visible in the district, especially in Hospet area,” said Mr Rahul N. Baldota, executive director, MSPL. “The effect has already percolated down with people making lifestyle changes,”

The Supreme Court, acting on a report of the Central Empowered Committee, had directed the suspension of 19 mining leases in the Bellary region and restrained these mines from carrying on mining operations until further orders. The report had slammed the Karnataka Government for allowing large-scale illegal mining. On Friday, the Court ordered a fresh survey on mining in the region.

As for the loss, in the last nine months 45 to 50 million tonnes could not be exported due to the ban on mining. At an average of Rs 7,000 a tonne, the revenue loss is estimated to be around Rs 3.50 lakh crore.

A mine owner who did not want to be identified said: “Few mine owners and companies who have been in this activity for the past 40 to 50 years, have strong finances, and varied businesses have survived and have retained their staff. But the ones with no financial strength have gone down or are in trouble.”

The district was once depended on agriculture and its allied activities. But in the last decade, it saw huge potential in iron ore mining and exports. This sudden increase in riches saw a huge influx of migrants in search of employment.

Bellary district has early 99 mining leases of which 69 mines are active. The major ones are MSPL, Jindal Steel and few private ones such as Vibhutigudda Mines and TNR Mines.

According to K.S. Dattathri, chief manager and lead district office, Syndicate Bank, “Since 2006, small and tiny industries were mainly servicing the mining sector. This sector witnessed an investment of around Rs 42,653.14 crore and provided employment to 77,425 persons. In addition to this, 109 large and medium industrial units with an investment of Rs 2.01 lakh crore offered employment to around 63,000 people. Now the whole sector is waiting and watching for the State Government to make a move.”

Published on May 10, 2011
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