SC ban on iron ore mining forces miners to sell assets

Excavator operator Shivaji Rao lost his jobWant a shave? Let's fly to Bangalore, they said. They had breakfast as well in Bangalore, and then lunch in Bellary, thanks to private planes. Their holidays were in Singapore, Dubai, the UK, the US and Australia. Their luxurious houses were filled with designer furniture. Their wives and children holidayed in Switzerland and bought Dior, Chanel, Prada and Louis Vuitton. Such was the life of the high-flying owners of mines in Sandur, Bellary and Hospet taluks of the now-infamous Karnataka mining district.Circa July 2010, the Karnataka government imposed a ban on all iron ore exports from Bellary. After a challenge in the Supreme Court, the ban was lifted in April 2011, but the state government delayed transport permits for export. Then the Supreme Court, hearing a petition on environmental damage, banned mining in Bellary on July 29. The court followed this up with similar bans in the other mining districts of Karnataka, Chitradurga and Tumkur.Mine owners are now reduced to selling some of their vast properties, shares and other commercial assets in an effort to tide over the crisis. "There has been no iron ore export for nearly 19 months, while a mining ban has been in place for five months. We have a commitment to banks, and have to pay demurrage (detention charge) at ports, as we have not loaded ships with ore in line with our commitments. What option do we have but to sell our property?'' asks mine owner Santosh S. Lad, 36.Santosh, with cousin Anil Lad, 37, was the classic example of the high-flyer lifestyle. The duo, along with cousins, owns V.S. Lad and Company, one of the oldest iron ore mining companies in south India. Anil, a Rajya Sabha MP from the Congress, is known to own a Bayliner speed boat, a helicopter, 22 cars and bikes, including a Bentley and an Audi. The boat has reportedly been contracted out, while half his vehicles are on the market.Anil Lad, owner of a speedboad and a helicopter, sold half of his 22 cars after the mining ban.Santosh estimates the loss due to the iron ore export and mining bans to be over Rs 300 crore. "How long can anyone sustain such losses?'' he says.The Lads are widely acknowledged to be among the richest in the district, perhaps second only to the discredited Reddy brothers. Yet, several of their employees have been laid off in the last two months, while the few that remain are being paid half their salaries. But imprisoned minelord G. Janardhan Reddy's employees are worse off. With all his mining operations shut down and his brothers keeping a low profile, the workers have no one to turn to.Sharadamma, 70, and her family comprising three sons and their spouses used to be employed at the Zeenath Transport Company's mines in Sandur. This company, as per the Supreme Court Central Empowered Committee report, paid a percentage of its profits to the Reddys. With the ban, Sharadamma was thrown out of her job. "I have worked 40 years for Zeenath mines, breaking small stones by hand. Yet they gave me Rs 20,000 and have thrown me out. How am I to survive?'' she asks. She ekes out a living by carrying bananas.Ugamesh U.B., 45, used to run a hotel on the Sandur bypass. "I used to earn Rs 2,000 to Rs 3,000 a day. Now I have shut my hotel,'' he says.Many mid-level mine employees have also been impacted. While foreman Somappa G.S., 27, is still hanging on to his job, living on half his salary of Rs 8,000 a month, excavator operator Shivaji Rao, 28, has been sacked. "If the mining ban is not lifted, my family and I will soon be on the street,'' he says. In Sandur, where mining has been going on since the days of the British, people are unable to envisage any livelihood outside the sector. "About 30 per cent of our people own land and are in a position to survive on agriculture. The rest are dependent on mining. The ban should go,'' says social activist P. Raju.Basant Poddar, vice-president of the Federation of Indian Mineral Industries, South, says that around 1.5 lakh people employed directly and indirectly in the mining sector have been affected. "Including the pig iron and sponge iron plants, about 50 per cent of employees have been laid off, which is well over 75,000 people,'' he says. Thirty-seven of the 54 sponge iron plants in Karnataka that produce 26,580 tonnes of sponge iron a day have already been shut. There is no supply of the lumpy iron ore needed for their furnaces. "The remaining are functioning at about 30 per cent capacity and will shut if nothing is done,'' says Karnataka Sponge Iron Manufacturers Association executive committee member U.K. Rana.The transport sector has been hit the hardest. Thousands of lorries have been stranded, while drivers and cleaners are left without a means of livelihood. Lorry owners have to repay loans. "No bank is willing to give us time,'' says Sandur Lorry Owners Association President K. Mallikarjuna.Chief Minister Sadananda Gowda, who also holds the finance portfolio, is worried. "The loss to the state exchequer has been Rs 4,500 crore,'' he told India Today. The national-level losses are even higher. In September 2010, two months after the export ban, India's iron exports fell by 47.46 per cent to 3.2 million tonnes, as per industry reports.The chorus across the mining sector is that the ban should be lifted. A special leave petition is being heard by the Supreme Court on the rampant and unscientific mining in Bellary. The next hearing is on January 22. An environmental impact assessment filed by the Indian Council of Forestry Research and Education in the apex court lays bare the extent of damage but says mining can be permitted, with safeguards. "We all agree that mining should be scientific,'' says Poddar. His words are echoed through the district.Published By: AtMigration Published On: Dec 30, 2011 23:34 IST--- ENDS ---

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SC ban on iron ore mining forces miners to sell assets

Rich mine owners in Bellary are selling assets to tide over the crisis triggered by the SC ban on iron ore mining.

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