Saturday, Aug 06,
Although the Supreme Court (SC) restored the right to NMDC to continue its operations, the imposition of a ban on iron ore mining in the Bellary district of Karnataka was in the nature of an extreme step made by the SC. It was meant to demonstrate the Court’s anger and disappointment at the gross violation of rules and environment laws by miners in the Bellary region, and show the Court’s resolve to bring these illegal operators to book.
The economic loss from a continuing ban on private sector units can be enormous and aggravate the slowdown that has already gripped the economy.
Nearly 21 million tonnes of steel-making capacity, located in Karnataka, is dependent on local iron ore supplies. Of the total production in Karnataka, which provides 24 per cent of country’s iron ore output, 75 per cent comes from the Bellary-Hospet region.
Shutting down of the Bellary mines will force a closure of the steel plants located in Karnataka as they can neither use the low-grade ore from Goa nor bring in the required quantities from Jharkhand and Chhattisgarh, as the high transport costs make that commercially unviable.
The closure of Karnataka steel plants will result in huge commercial losses to these companies, but the far bigger impact will be on the loss of production and employment in downstream industries such as automobiles, consumer durables, machine tools and engineering products.
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