At least 18 iron ore mines have been granted permission by the High Court of India on Monday to resume mining activities in Karnataka after a more than a year of suspension on environment concerns, pointing to what could mean 5 million tonnes a year of renewed production.
Despite world prices of steel currently stable, the price of the basic commodity used to make it, iron ore, has again continued to drop.
"It is a positive order ... other category mines will also start opening slowly," R.K. Sharma, secretary general of the Federation of Indian Mineral Industries, said.
Immediately, shares of Kalyani Steel and Sesa Goa surged on Monday following the pronouncement of the Supreme Court. Shares of Kalyani Steel jumped 12.46 per cent, while Sesa Goa grew 1.22 per cent, according to India Times.
India's High Court on Monday announced it is already allowing some 18 companies in Karnataka to resume its mining operations. The Category 'A' mines will resume operations but with conditions.
India classified its mines into three categories as A, B and C. Category A mines are those with least or no irregularities, while those with maximum illegalities were put under Category C.
Iron ore mining was banned last year in Bellary, Chitradurga and Tumkur districts of Karnataka due to environmental violations. Prior to this, India used to churn out 200 million tonnes a year of iron ore, half of which it exports, making it the third-largest exporter in the world.
Though this time, exporting Indian iron ore may no longer be feasible at the moment as India is in short supply of the key steel making ingredient.
"I don't expect exports to resume at all now because domestic consumption is at 30 million tonnes," R.K. Sharma said.
Overseas sales have been largely affected as New Delhi and state governments pushed on illegal mining.
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