India’s Karnataka, the nation’s second-richest iron-ore producing state until a court ruling restricted mining in 2011, will resume supplies from seven mines that restarted operations after the ban was lifted.

Initial supplies from the mines will start in the next two weeks, said H.R. Srinivasa, the state’s mining director and head of a committee appointed by the top court. Combined shipments may reach 2.5 million metric tons by March, he said.

The Supreme Court in September partially lifted a year-old ban on mining in Karnataka and allowed 18 mines to restart after securing required approvals. The court had halted mining in August, 2011 to probe violations of environmental norms, allowing only state-run NMDC Ltd. (NMDC) to mine 1 million tons a month and ruling all sales to be conducted via online auctions.

The seven mines have started operations and their current output of about 1 million tons will be sold in phases, Srinivasa said. Three more mines are expected to start this month, he said.

The court-appointed committee has sold about 28 million tons of ore through online auctions last calendar year and is targeting a similar quantity in 2013, enough to meet demand, Srinivasa said. JSW Steel Ltd. (JSTL), which runs its largest plant in the state, expects to operate its factory at 75 percent to 80 percent capacity, enough to achieve 8.5 million tons of production, Seshagiri Rao, group chief financial officer, said in an earnings call on Jan. 28.

The Mumbai-based steelmaker, India’s third-largest producer, is expecting supplies to rise in the coming weeks, should the court allow more mines in the state to start, Rao had said. The court on Feb. 1 said it will hear the Karnataka mining cases on a day-to-day basis from Feb. 18.

Courtesy: Bloombarg