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Kudremukh Iron may go for spread

Mahua Venkatesh in New Delhi

The board of directors of the public sector Kudremukh Iron Ore Company Ltd, which faces closure, will shortly meet to consider the company's future course of action.

The company is likely to chalk out a possible diversification plan or identify alternative mining sources. This apart, the consultative committee of the steel ministry will also hold a meeting in December to discuss the same.

A government official said that though efforts are on to diversify, such a plan for KIOCL might be a difficult proposition since the company has been specialising in mining alone. The official, however, added that efforts are on to work out an alternative viable survival plan for the company.

"We are studying the situation closely and a final decision on the fate of the company will be taken soon," said the official.

Meanwhile, the company has already initiated several voluntary retirement schemes to cut down workforce. The company is likely to announce a fresh VRS in the next few months. KIOCL currently employs around 2,000 people.

A profit-making public sector unit, KIOCL is an export-oriented company, with markets such as Iran, Iraq and Japan under its fold. Sources said that the company has till now faced no labour problem and has been recording a consistent growth.

Earlier the government had taken initiatives to go ahead with its divestment plan. The Supreme Court has passed an order saying that the mining operations of KIOCL should be shut by 2005 owing to protection of the forest reserves.

The court's decision was taken in response to the Karnataka Forest Department (wildlife) to notify KIOCL's mining area and the existing forest in Chikmagalur district as National Reserve Park.

In 1969, KIOCL got a mining lease for 30 years which ended in July 1999.

The export-oriented company has been earning $150 million in foreign exchange every year. The company upgrades a low grade iron ore into a good grade ore for export purpose. It accounts for a large percentage of iron ore exports of the country.

The notification that it would be made a national park came in 1986.

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