Bengaluru | September 13, 2017: Many sponge iron units in Karnataka are facing closure because of the non-availability and high cost of iron ore.

“Due to cap on iron production in Karnataka and because of the high cost at auctions, the survival of sponge iron units is becoming untenable,” said Sanjay Pattnaik, president of the Federation of Indian Mineral Industries (FIMI).

He said 20 to 30 sponge iron units in the State are set to shut shop. They are located in Ballari, Hospet and Chitradurga.

Sitaram Kemmannu, Associate of FIMI based in Hospet, said, “About 50 mines have not shown interest in continuing business or to adopt R&R plan. The reason citied by these 50 mining lease holders is that the cost of R&R plan implementation is high. Low production level fixed by CEC is not economical and the cut in mining lease period has also discouraged the lease holders.” Mining Mazma

FIMI is to hold its annual three-day meet on ‘Mining, Exploration Convention & Trade Show (Mining Mazma 2017) from September 14 to 16 at Bangalore International Exhibition Centre (BIEC), Bengaluru.

RK Sharma, secretary general, FIMI, said that to attract FDI and expertise in exploration, companies having the latest technology should be given incentives.

On the auctioning of potential blocks and poor responses, he said factors for tepid response is mainly due to lack of credibility of the quality of exploration data and geographical reports, mineral grade, land ownership issue and linking the same with end use reservation besides depressed commodity markets. Pattnaik said that currently the mining industry in India is highly taxed and effective tax rate works out to be 69 per cent. Over and above this, there are other taxes such as 18 per cent GST on royalty, 10 per cent tax levied by SC in Goa and Karnataka, besides charges payable towards statuary clearances and local taxes/cess.

(Source: http://www.thehindubusinessline.com/)