Karnataka bans transportation of iron ore to ports

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31 Jul 2010

Karnataka, which is the second largest producer of iron ore in the country, has followed up its ban of export through 10 small ports in the State with a ban of ore transportation to the ports.

The Karnataka Chief Minister, Mr B.S. Yeddyurappa, told a select group of editors and senior journalists at a meeting here on Thursday that transportation of iron ore to these State-owned ports has also been banned.
“The lease holders will no longer be given permits to transport iron ore to these ports. The Government will also tighten up the administration to implement the ban,” the Chief Minister said.
Karnataka exports between 25 million tonnes and 30 million tonnes of iron ore every year. It produces about 45 mt out of a total of 225 mt of iron ore mined in the country. Some of the ports from where the iron ore exports have been banned include, the old Mangalore, Pudubidri, Kundapur, Malpe and Karwar ports.
The decision to ban iron ore exports follows rampant illegal mining and tax evasion in the State. The State Government has already asked the Lok Ayukta to investigate and submit a report on illegal mining in Karnataka.
“We will implement whatever the Lok Ayukta recommends,” Mr Yeddyurappa said. He, however, ruled out handing over the illegal mining case to the CBI as the “Lok Ayukta was competent enough to handle the issue.”
The ban will lead to massive loss for the State from royalty payments. During 2009-10, the State received a total royalty of Rs 380 crore from mining operations.
Mr Yeddyurappa said that the Centre should also ban iron ore exports and come out with a policy on iron ore mining to get rid of illegal activities in the sector.
Miners' view
The Federation of Indian Minerals' Industries Secretary General, Mr R.K. Sharma, termed the ban as a knee jerk reaction which will affect only those who carry out mining through legal means.
“This decision will not curb illegal mining but hurt those who carry out mining through legal means,” Mr Sharma said. Such a ban tramples on the fundamental right to carry out business under Article 19 of the Constitution, he pointed out. He said the Karnataka Government alone will suffer a loss of about Rs 30 crore a month on royalty payments while the Central Government will lose out on taxes and duties from the ban on exports. About 55,000 jobs will also be lost because of the ban, he said.
“No State Government in the country has shown such helplessness as shown by the Karnataka Government,” Mr Sharma said.
There are about 100 mining lease holders in Karnataka and out of which between 20 and 25 export iron ore.

Source: The Hindu Business Line