Karnataka’s overall annual production of 30 MnT is still not fulfilling the requirements of Indian Steel industry. It pleads the Supreme Court to permit an increase Iron ore production to around 50 MnT yearly.
Indian Steel Ministry has filed an application mentioning that the 30 MnT production limit from Karnataka, as fixed earlier by the Supreme Court, is not sufficient to meet the annual needs of the industry. Steel industry, which depends mainly on Iron ore, is facing shortage of the raw material owing to the mining ban imposed in Karnataka. Still the mines are asked to produce Iron ore in a certain limit.
India is the fourth largest producer of Steel in the world and might soon become second largest. However, the industry suffered a lot owing to the regional crisis for the raw material, especially in Karnataka. Around 32 Sponge Iron plants have stopped operations due to the material shortage. Finished Steel output in India witnessed a very slow and inadequate growth of about 2.5 per cent in FY13. The overall Steel consumption in the country grew up by a mere 3.2 per cent during FY13.
At present the overall capacity utilization of the Steel industry has touched an all-time low of 81 per cent. Low productions from Karnataka were also reasoned as a cause for low Steel capacity utilization of the country.
Karnataka Government pleads asking permission from the Supreme Court to increase the yearly Iron ore production to 40 MnT from the current 30 MnT in order to meet industry requirements. They also seeked permission for extracting fresh lease for producing additional 10 MnT of Iron ore in Bellary, Tumkur and Chitradurga districts.
Steel Ministry in its application has sought direction to the Karnataka Government, Central Empowered Committee and monitoring committee to accelerate the process of opening up all category A and B mines within a limited time period. It also directed the State Government to finish with the auction process of category C mines.
Presently about 17 mines have begun operations in the state. During April-September, 2014 the overall production was 6.9 MnT which might rise up to 16 MnT.