The Federation of Indian Mineral Industries (FIMI), Southern Region has requested the Karnataka government and Ministry of Mines to tackle arrival of large quantities of iron ore into the State despite availability of local stocks.

The concurrent restrictions on trade of iron ore in Karnataka is suppressing the growth of the sector and will have significant deleterious effects on the industry and also the State exchequer, according to a FIMI statement. FIMI has also raised serious concerns about the impact on employment, revenue, and infrastructure development in the State. In Karnataka, around 4 lakh tonnes of iron ore was imported in October 2020 from eastern part of India about 1,620 km away by rail. FIMI had highlighted the issue and raised the concern with the State Government in November 2020. But in the past 4 months, almost 15 lakh tonnes of iron ore has been brought into the State, it said.

The rest of India is exporting iron ore as per the EXIM policy of Government of India thereby ensuring fair revenue to the State exchequer including foreign exchange. As per the data available, the total export in 2019 from other parts of India is 10.34 million tonnes of fines and 1.16 million tonnes of lumps.

These restrictions are also distorting the market as the buyer has the freedom of trade, i.e. right to purchase iron ore from either the e-auction or from other States or even to import from overseas.

‘Expedite legal process’

The restrictions on sale of iron ore in Karnataka were imposed by the Supreme Court in 2011-12 on allegations of illegal mining. FIMI had written to Ministry of Mines urging it to submit before the Supreme Court the required details to resolve the issue.

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