The Supreme Court has allowed 18 mines to resume iron ore mining in Karnataka, the country's second-largest supplier, after a suspension of over a year on environment concerns, Justice Aftab Alam and Justice Ranjana Prakash Desai said on Monday.
India used to produce about 200 million tonnes a year of iron ore and exported about half of that, but clamp downs on illegal mining and New Delhi's desire to keep supplies for domestic steel mills have slashed that figure.
The output from the re-started mines will be in addition to state-run NMDC's 1 million tonnes per month, which was cleared by the Supreme Court for production from August 6, 2011.
The Supreme Court last year had also banned iron ore mining in Bellary, Chitradurga and Tumkur districts of Karnataka citing environmental violations, and asked a government body to carry out an environmental impact assessment.
Shares in Sesa Goa, JSW Steel, Kalyani Steel and NMDC gained after the order.
Sesa Goa, which operates iron-ore mines in Chitradurga region of Karnataka, traded with 2.7 per cent gains. The stock was the top Nifty gainer.
JSW Steel shares advanced over 1 per cent. The company procures 70 per cent of iron-ore from Karnataka.
NMDC shares traded with over 1.6 per cent gains. NMDC's total declared production in Bellary was 5 MT.
Kalyani Steel shares shot up 12 per cent. The firm gets 0.5 MT of iron ore from Bellary.
"The opening of mines will take some. It may take 1 month to 1 year depending on different approvals. We don't have mines, but we are waiting for miners to provide iron-ore at competitive prices," RK Goyal, MD of Kalyani Steel told NDTV Profit.
Bhavesh Chauhan of Angel Broking told NDTV Profit that despite the order was in line with expectations.
"For JSW Steel and Kalyani, there will be higher utilization and iron ore costs would come down. So, the order is slightly positive for these two firms," Chauhan added.
Earlier, the Centrally Empowered Committee had recommended resuming mining activities for 21 companies in Karnataka. On Friday, the Supreme Court had indicated that it may permit resumption of iron ore mining in category A mines in Karnataka's Bellary, Chitradurga and Timkur districts, provided they complied with all statutory forest and environmental clearances. The A category mines are those who are either free of any illegality or had committed marginal illegalities in their mining operations.
The top court had enforced a ban on mining in Karnataka since August 2011 after investigations conducted by the court’s Central Empowered Committee (CEC) highlighted environmental damage brought about by rampant illegal mining.
Following a series of hearings, in April the court accepted the CEC’s recommendations that some mines deemed legal be allowed to restart following reclamation and rehabilitation but that the state’s total output be capped at 30 MT per year.
(With inputs from Thomson Reuters)
India used to produce about 200 million tonnes a year of iron ore and exported about half of that, but clamp downs on illegal mining and New Delhi's desire to keep supplies for domestic steel mills have slashed that figure.
The output from the re-started mines will be in addition to state-run NMDC's 1 million tonnes per month, which was cleared by the Supreme Court for production from August 6, 2011.
The Supreme Court last year had also banned iron ore mining in Bellary, Chitradurga and Tumkur districts of Karnataka citing environmental violations, and asked a government body to carry out an environmental impact assessment.
Shares in Sesa Goa, JSW Steel, Kalyani Steel and NMDC gained after the order.
Sesa Goa, which operates iron-ore mines in Chitradurga region of Karnataka, traded with 2.7 per cent gains. The stock was the top Nifty gainer.
JSW Steel shares advanced over 1 per cent. The company procures 70 per cent of iron-ore from Karnataka.
NMDC shares traded with over 1.6 per cent gains. NMDC's total declared production in Bellary was 5 MT.
Kalyani Steel shares shot up 12 per cent. The firm gets 0.5 MT of iron ore from Bellary.
"The opening of mines will take some. It may take 1 month to 1 year depending on different approvals. We don't have mines, but we are waiting for miners to provide iron-ore at competitive prices," RK Goyal, MD of Kalyani Steel told NDTV Profit.
Bhavesh Chauhan of Angel Broking told NDTV Profit that despite the order was in line with expectations.
"For JSW Steel and Kalyani, there will be higher utilization and iron ore costs would come down. So, the order is slightly positive for these two firms," Chauhan added.
Earlier, the Centrally Empowered Committee had recommended resuming mining activities for 21 companies in Karnataka. On Friday, the Supreme Court had indicated that it may permit resumption of iron ore mining in category A mines in Karnataka's Bellary, Chitradurga and Timkur districts, provided they complied with all statutory forest and environmental clearances. The A category mines are those who are either free of any illegality or had committed marginal illegalities in their mining operations.
The top court had enforced a ban on mining in Karnataka since August 2011 after investigations conducted by the court’s Central Empowered Committee (CEC) highlighted environmental damage brought about by rampant illegal mining.
Following a series of hearings, in April the court accepted the CEC’s recommendations that some mines deemed legal be allowed to restart following reclamation and rehabilitation but that the state’s total output be capped at 30 MT per year.
(With inputs from Thomson Reuters)
