Iron ore: Supreme Court raises ceiling for iron ore production in Karnataka
The Supreme Court has raised the iron ore mining limit in Karnataka to 50 Million tonnes per annum (MTPA) from 35 MTPA earlier.
The Supreme Court has raised the annual ceiling for iron ore production in three districts in Karnataka. The court has indicated that the production ceiling of iron ore mines in Ballari district mines has been increased to 35 MTPA from 28 MTPA earlier. The ceiling for mines in the other 2 districts (Tumakuru and Chitradurga districts) has been collectively raised to 15 MTPA from 7 MTPA earlier.
Over a medium to longer term horizon, this development augurs well for both NMDC and JSW Steel. NMDC has two mines in the Ballari district in Karnataka viz. Dominalai and Kumaraswamy. Higher production cap in the Ballari district, would potentially aid NMDC to apply for higher Environmental Clearance (EC) limit for both its Donimalai and Kumaraswamy mines, thereby auguring well for the merchant miner. This development also augurs well for JSW Steel as it would help the steel major to have access to higher-grade iron ore within Karnataka itself, thereby resulting in savings in iron ore transportation costs for the company. The increase in cap would lead to higher iron ore availability in Karnataka, thereby auguring well for both JSW Steel’s current operations as well as ongoing expansion at Vijayanagar. JSW Steel is currently in the process of expanding its steelmaking capacity at Vijayanagar by 7.5 MT till end of FY25E (from 12 MTPA currently JSW Steel’s Vijayanagar steel-making capacity is expected to be expanded to 19.5 MTPA till the end of FY25E).
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