Mumbai: Iron ore exporters in Karnataka will call on the Supreme Court in early July to force the state government to uphold its lifting of an export ban, which has got delayed by an inquiry into illegal mining.
“We will file a writ of mandamus and contempt (with the Supreme Court),” on July 4 or 5, Basant Poddar, managing director of Mineral Enterprises Ltd. (MEL), one of the petitioners in the iron ore export case, told Reuters.
The southern state had banned shipments of iron ore from 10 ports and stopped its transport to other ports for exports in July last year, citing a drive against illegal mining and the need to preserve the raw material for local steel makers.
But the country’s top court lifted the ban on 5 April, asking the government to allow exports from 20 April. The state government has so far not issued any transport permits .
“They are losing royalty of Rs 30-40 crore ($6.7-$8.9 million) each month due to the export ban, plus there are delays in issuance of permits even for domestic consumption,” said David Pichamuthu, head of the Federation of Indian Minerals Industry (FIMI), southern region, based in Bangalore.
Pichamuthu said the FIMI had not received a response from state chief minister B.S. Yeddyurappa so far to a letter sent raising the issue.
State government officials said iron ore exports are unlikely to be allowed unless the Central Empowered Committee (CEC), appointed by the Supreme Court, completes its report on illegal mining, which was the major reason for the ban.
“We haven’t started issuing export permits as yet because a CEC survey is underway on the blocks, and they will take time to complete the project. We may start issuing permits after that,” said D.R. Veeranna, additional director with directorate of mines and geology.
He did not give a time-frame for completion of the project.
State government officials have given several deadlines for issuing the permits which have passed without any exports happening. On 6 June it suggested permits could be issued within 15 days.
The Supreme Court-appointed CEC is surveying the mining regions of Karnataka to check on illegal mining along with the local forest, revenue and mining departments.
Poddar said about 15 million tonnes of iron ore were lying in stockyards and mines of the exporters and faced the risk of erosion due to seasonal monsoon rains.
India is the world’s third largest exporter of iron ore with most of its approximately 100 million tonnes of overseas sales landing in China, which has the world’s largest steel industry. Karnataka’s share stood at about 25% of total exports before the ban.
India has been losing its export market to other smaller countries like Russia, Peru, Iran, Indonesia, while Australia and Brazil have strengthened their position.
Any additional shipments from India are expected to ease the current tight supply situation, and pressure global prices.