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Orissa allows 6 iron ore mines to resume ops

BHUBANESWAR (Reuters) - India’s top iron ore producing state said on Monday it has allowed six mines to restart, three days after they were ordered to shut down in a crackdown on illegal mining.

The six were among 23 mines closed down on Friday pending submission of paperwork, adding to a total of more than 300 mines in Orissa shuttered since July 2009 as India tightens mining regulations.

Production lost at the six mines was about 174,000 tonnes since Friday, U.C. Jena, Orissa’s deputy director for mines, told Reuters.

All of the 23 mines have lost about 450,000 tonnes in output since being shut down on Friday, he added, amounting to a fraction of Orissa’s annual output of about 75 million tonnes.

The shutdown last week was a procedural step, officials said, and not related to a ban on iron ore exports the state wants to propose to boost local supplies.

Orissa is the third-largest exporter of the steelmaking raw material in the country, the world’s No. 3 supplier. India sells about half of its annual output of more than 200 million tonnes to top iron ore importer and steel producer China.

Tight supply of iron ore from India, largely due to a ban on exports from its Karnataka since July, had helped push spot prices to near record highs.

“I hope some more operators will submit their valid documents. If they submit we will issue permissions,” said Jena, adding the documents being sought include forest clearances and mining leases.

Those permitted to operate include the mines of Tata Steel and Essel Mining and Industries Ltd.

Orissa has around 600 mines, more than half of which shut operations after the state began a crackdown on mines in July 2009 following allegations some were operating without licences.

Indian exports of iron ore fell for the sixth straight month in December because of the Karnataka ban, industry data showed on Monday.

But exports could shrink further if the Orissa government makes good on its threat to send a proposal to the central government by early February to halt iron ore exports to prevent illegal mining and increase local supplies.

Many, however, see the Orissa government’s proposal as a knee-jerk political reaction after the central government either halted or scrapped multi-billion dollar investments in the state over environment worries.

Those projects include a $12-billion steel mill by South Korea’s POSCO, which has been halted, and plans by London-listed Vedanta Resources to expand its alumina refinery and mine bauxite that have been scrapped.

India will take a decision on granting environment clearances for POSCO’s project on Jan. 31, a minister said on Monday.

Editing by Krittivas Mukherjee and Clarence Fernandez