Mining sector in limbo, enters 2013 fraught with worries

Year 2012 for India Inc was disastrous. It was failure after failure that hit the mining industry. First it was Karnataka where mining activates were banned and then Goa. The shortage of iron ore also affected the steel-makers. Input costs surged exponentially, reports CNBC-TV18's Vineetha Athrey.

The script for the mining and steel sector played out with its own share of complications and none too happy. If u thought that last year was bad due to the ban on iron ore mining in Karnataka then you are wrong as 2012 turned out to be even worst. All the hard lobbying to resume mining barely led to any substantial development in the state. Early 2012 saw Karnataka struggling to cope with the mining ban. As the mines in Bellary grew cold with inactivity, there was no relief in sight. It was till April, when the SC offered some hope. The apex court accepted the central empowered committee's recommendations. They directed NMDC to mine 30mn tons per annum. This also paved the way for restarting of 20 categories a mine. However, they made it mandatory for it to implement the reclamation & rehabilitation plan first. Vinod Nowal of Dir & CEO, JSW said, "because of shortage of iron ore and low quality, our cost of production has gone up by Rs 4,000". Finally, on Sept 3rd after a hiatus of over a year the ban on mining was lifted but there was a catch. The order was subject to valid mining leases, forest and environmental clearances. Unfortunately, most of these had expired. Basant Poddar the Chairman of South, Federation of Indian Mineral Industries said, "lot of category a mines have expired so they will take at least 2 yrs statutory time. One need’s to get several statutory clearances and that takes time". The ailing steel industry is hoping for some intervention from the sc. However, Karnataka is not alone, neighbouring Goa has also joined the distressed pack. Three months ago a mine by SESA Goa was one of the busiest mine. Every year 4.5 mn tons of iron ore was mined here and this place was a buzz with 1500 EMPL. Since, Sept this year the ban on iron ore mining has been imposed in Goa, there's only a deafening silence. Following a SC order mining stopped in all 90 working mines across Goa on environmental concerns. Bringing a halt in its annual production of 40 mn tons of iron ore. PK Mukherjee of MD, Sesa Goa said, "everything is shut. Our mining revenue is zero". Further, the SC-appointed CEC, to recommend suspension of OPS. It was in 42 mines in Goa due to illegalities. It feared resultant unemployment. The state govt is working on an action plan to scrutinize all mining leases. RK Verma, the Principal of Secretary of Govt of Goa said, "we would like to present the facts that the CEC has said, what steps the Goa govt has taken so far". However, the CEC has recommended R&R implementation in Goa also before resuming mining. This could complicate matters further. The mining industry now intends to appeal to the SC during the next hearing in Jan 2013. It hopes for partial resumption of OPS in Goa. In other words, industry is hoping for a better new year.