Mining scam may hit steel investments

Bengaluru : Dirty politicking in the state has exposed the underbelly of the mining industry and also brought the iron ore industry to a standstill. The snowballing crisis could dampen Karnataka's investorfriendly image, and particularly affect investments in steel. Steel companies had accounted for the major chunk of the Rs 50,000 crore investments attracted by the state during the Global Investors' Meet last year.

Basant Poddar, vice president of the Federation of Indian Minerals Industries (FIMI-South ), says: `` Many companies are already rethinking on their decision to invest in Karnataka. Land acquisition and power are also posing big challenges.''

G V S B Reddy, COO at mining consultancy Vajra Natural Resources, says even if the projects are not withdrawn, they are likely to be put on hold. With the ban on mining, they have good reason to seek extension for their projects.'' India produces 65 million tonnes of crude steel, of which Karnataka accounts for 16 million tonnes