Mining activity at Kudremukh Iron Ore Company Ltd will come to a grinding halt from Tuesday morning. The profit-making public sector undertaking is located in the Western Ghats in the Malnad region of south west Karnataka.
Disclosing this to rediff.com here on Monday night, an exasperated KIOCL Chairman and Managing Director S Murari said he was forced to order stoppage of all work at the mines from the first shift, starting at 6 am tomorrow, thanks to the failure of the Union ministry for environment and forests to extend for one more year the temporary lease that expired Monday.
Though the Karnataka government, which owns the 4,605 hectares of the mining land, has already recommended to the Centre its willingness to extend the lease by another year, pending a host of other issues for granting a long-term lease of over 20 years, neither Union Minister for Environment and Forests T R Balu nor his top officials signed the dotted line till late Monday night.
This is not the first time the 2,400-odd Kudremukh employees have been kept on tenterhooks. Even last year the, the Centre and state government dilly-dallied till the last minute to grant a one-year lease after the expiry of the original 30-year mining lease given to the company in 1969.
Ironically, the presence of state Minister of Mines V Muniyappa along with senior officials of the state department of mines and geology, including secretary S Subramanium, in Delhi has made little difference.
In fact, last week Murari met Balu with Union Minister for Mines and Minerals Brijesh Kumar Tripathi to try and convince the former on the urgency of extending the lease.
As Kudremukh falls in the rich virgin forests of the Sahydri mountain range, the PSU is at the mercy of the environment ministry as the Wildlife Act of 1972 empowers the assistant or revenue commissioner of the area to either allow or ban any mining activity if the region is notified as a national park.
Since KIOCL began mining operations in 1969, prior to the enactment of the Wildlife Act and other subsequent acts/amendments, the ministry allowed it to operate till the expiry of it original 30-year lease on July 24, 1999. The terms and conditions remained unchanged when the lease was extended last year till July 24, 2000.
The state government too complicated matters by provisionally notifying the entire area as a national park in 1987. This makes central clearance mandatory for mining the deposits, whose reserves have been estimated by geologists to be in the order of a whopping 3 billion metric tonnes.
Interestingly, Murari summoned media persons to his corporate office in Bangalore earlier in the day to clarify on a slurry leakage on July 17, 2000, that brought the processing activity to a stop for four weeks.
Admitting the leakage of iron ore slurry through its pipeline at Nooral Bettu area near Mullikar village would lead to a loss of $ 50,000 for the Rs 6,400-million company during the current financial year (2000-01), Murari blamed the fury of the south-west monsoon for the landslides that caused the pipeline to burst and leak
"The slurry leakage has caused a spillage of about 4,000 metric tonnes of mined ore, and halted shipping activity from the nearby Mangalore port. Every week, the company ships 16 batches of slurry to the port through the pipeline with each batch consisting of 15,000-20,000 MT.
"With work coming to a halt from Tuesday, even repair work on the pipeline will be discontinued," Murari said.
The saga of Kudremukh (which in the local lingua franca means hills in the shape of a horse face) began in the early seventies. In August 1980, India signed a $ 630-million with the Shah of Iran to supply 150 million tonnes of iron ore over a 21-year period.
The Shah was overthrown soon after and that virtually sealed the fate of the mega project. Even the upfront payment of $ 230 million by Iran for the project did not help as the post-Shah regime failed to take delivery of the first shipments.
Undeterred by the initial setbacks, the PSU set its sights on other countries like Japan and South Korea and not only managed to survive but also rake in profits in the last three decades.