Most mining firms are unable to start operation at their mines in Karnataka even though the Supreme Court allowed them to resume mining three months ago.

   

Some reports indicate that of the 117 mines falling in the category A & B areas, only about 10 mines are currently operational. The apex court allowed mining in areas falling in these two categories.

   

Mining companies are unable to restart operation because of several reasons which include cash flow constraints, procedural hurdles. It is learnt that private miners are currently producing only around 5 lakh tonne per month of iron ore.

   

In the past several months, there is virtually no cash flow and this caused liquidity problems, some reports indicate.

   

Some mining firms struggle to clear the penalty dues. Since banks are not willing to provide funds, they are looking to sell real estate assets. But in Bangalore, the market is depressed and they can't even get the right price, reports suggest.

   

Procedural delays too have complicated matters. "The process of forest renewals was stopped since September 2010 and it's only after the SC order that the almost 3-year moratorium was removed. The production cap makes it uneconomical to mine. This too has compounded the delays, some industry sources informed.