Bangalore: More than four months after public sector Kudremukh Iron Ore Company Ltd. (KIOCL) stopped mining at Kudremukh from the midnight of December 31 heeding a Supreme Court order, employees of company face an uncertain future.

With the Union Government so far failing to find an alternative to keep the company running, about 300 of the roughly 1,950 workers (comprising 1,350 workers who were involved in mining operations and 600 associated with its pellet plant in Mangalore and other locations) who were on the company's rolls on December 31 have opted for a Voluntary Retirement Scheme (VRS) that was floated by the KIOCL management in the February-April period.

260 staff relieved

Out of this, 260 employees have been relieved by the organisation till April. The company has accepted the VRS applications of another 30 to 40 workers and they will be relieved in May and June, sources said.

The KIOCL Board has empowered its Chairman to float a VRS any time during the year till December under the Gujarat model of VRS in public sector units. Employees opting for VRS will be paid two months' (60 days') salary for each completed year of service or for each year of service left, whichever is less. Yet another round of VRS is in the offing, sources added.

Close to 1,700 workers still on the rolls are a demoralised lot. "We are depressed... all our friends are leaving. There is no enthusiasm to come to work. We fear for the future," an employee told The Hindu .

KIOCL stopped mining at Kudremukh to comply with a Supreme Court order to protect the environment from the ravages brought about by years of mining iron ore in the ecologically sensitive Western Ghats region.

KIOCL was the country's largest exporter of iron ore and pellets with exports of 0.7 million tonnes of ore and 3.60 million tonnes of pellets worth around Rs. 1,850 crore, mostly to China in 2004-05.

Cash reserves

At the time of winding up its mining operations, KIOCL (a 100 per cent export-oriented unit) was sitting on cash reserves of about Rs. 1,300 crore. The Centre holds 99 per cent equity in the company.

The company is now banking solely on sales from its pellet plant in Mangalore for sustenance. About 85 per cent of the ore scooped from the Kudremukh mines was converted into pellets and exported mainly to China while the remaining 15 per cent was sold in the local market.

The company has made alternative arrangements to keep the pellet plant running by forging an agreement with the National Mineral Development Corporation (NMDC) to source ore for running its 3.6-million-tonne-capacity pellet plant.

Altered specifications

But the change in characteristics of the ore sourced from the NMDC forced the company to alter the specifications of the products rolled out of the pellet plant.

"The ore from Kudremukh had magnetite characteristics whereas the NMDC ore is haematite.

This was not found suitable for making pellets within the existing specifications, and hence the product specifications had to be changed," sources said.

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