Kudremukh Iron Ore Co ( KIOCL ) - Update by Saumin Patel

saumin patel to me

State-run KIOCL has got the lease to the 10 million tonnes Chikkanayakanahalli or CNH iron ore reserve, paving the way for supplies to its ore plant at Mangalore for at least three years, according to a senior executive.

KIOCL, formerly Kudremukh Iron Ore Company , was forced to give up its mines in 2005 after a Supreme Court ban, and was running its pellet plant with supplies from national miner NMDC.

Managing director K Ranganath said though the Centre had granted environmental clearance to the CNH reserve in 2009, the site could not be taken over because the boundary of the reserve, which is shared by other lease owners, was not clearly marked. However, new boundary sketches will be finalised in a few weeks and KIOCL can apply for forest clearance, he added.

The Karnataka government had already granted its in-principle approval for the grant of mining lease over an area of 117 hectares.

KIOCL, which exports 60% of its iron ore concentrates and iron oxide pellets, will also pursue its claims on Ramanadurga and Khandadhar. The company had sought mines in the Ramanadurga belt in Bellary. Now the mining area, which can be shared by three to four parties, has more than 1,100 applicants, including heavyweights such as NMDC , JSW and ArcelorMittal.

KIOCL is also claiming preferential right for allotment of mining lease in Khandadhar, where it has already done prospecting work. KIOCL has managed to increase production to 2.1 million tonnes from 1.5 million tonnes last fiscal year. It posted a profit of Rs 75 crore, compared with a loss of Rs 177.27 crore last year.

Ranganath said the profit was achieved despite the fact that the company has about 350 people on its payrolls for just maintaining the closed mines and assets. In fact, the company was in talks with steelmaker SAIL, to sell its equipment that have been lying idle. "We would like to sell it as a package as it would bring us better valuation and not in bits and pieces," said Ranganath.

The equipment used in Kudremkh, once the country's biggest iron ore mine with an annual capacity of 22.5 million tonnes, can only be accommodated by a company with similar capacity mines, like Chiria, said Ranganath.