The Federation of Indian Mineral Industries (Fimi) has suggested to the Government to take up feasibility study of underground mining in Karnataka's Western Ghats. In addition to 2.16 billion tonnes of haematite ore deposits in Karnataka, there is magnetite ore to the tune of 7.8 billion tonnes. “Fimi is ready to support feasibility study between northern boundary of Bababudan Giri hills in Kudremukh up to Goa,” Mr Basant Poddar, Chairman, Fimi-South. “Underground mining is successfully working beneath Johannesburg in South Africa and Stockholm in Sweden. This is an option the Government has to consider seriously, to tap magnetite iron ore of 7.8 billion tonnes,” he added. Fimi office bearers said mining in Goa and Maharashtra is on the Western Ghats. Why is that they have permission to mine and not in Karnataka, they questioned.
Favouring lifting of export ban, Mr Hothur Shadab Wahab, Vice-Chairman, Fimi, said iron ore of Karnataka is extremely friable and after repeated handling, generates 80 per cent fines and only 20 per cent lumps. But most of the domestic steel plants and all sponge iron plants cannot consume fines.” “Therefore, since the Chinese market can absorb the same, it was being exported. If the domestic steel plants and all sponge iron plants can set up sintering and pelletisation plants, there will be no need to export. In any case, with the 30 per cent export duty and the abnormal hike in railway freight rates, exports have become unviable,” he added.
According to Mr D.V. Pichamuthu, Director Fimi-South, there is a general impression that mining is a highly profitable business. However, for legitimate miners, the reality is quite different. Taking the case of iron ore, royalty is payable at 10 per cent of pit mouth value. Karnataka levies a forest development of 12 per cent which is not the case in any other State.
If the MMDR Bill, 2012 is passed by Parliament, an additional 10 per cent will be levied and along with cesses, take the royalty to effectively 22 per cent. If all other taxes are taken into account, effective taxation will cross 50 per cent.