India's Orissa state slams brakes on 23 iron ore mines

State government says "No permit - no mining" to 23 mines without requisite operating clearance. Half of Orissa's mines now out of commission after government gets tough on unlicensed mining.

BHUBANESWAR, India (Reuters) -

India's top iron ore producing Orissa state said on Saturday it has stopped 23 iron ore mines from operating as they had not submitted proof of the necessary clearances.

The state government has withheld permission to the mines in Keonjhar district since Friday, deputy director (mines) of the state government U.C Jena told Reuters.

"They have been asked to supply documents like forest clearance, mining lease, surface rights etc within seven days. If they submit we will issue permissions," he said.

India is the world's third largest supplier of iron ore, with about half of its total output of more than 200 million tonnes landing in China, which houses the world's largest steel industry.

Orissa has approximately 600 mines. Of them more then half have closed down operations for more than a year after stronger state government enforcement of regulations.

The state, produces about 75 million tonnes of iron ore fines and lumps annually, began a crackdown on mines in July 2009 following allegations some were operating without licences.

The Orissa government has sought a ban on exports of the steel making commodity and is likely to send a proposal to the federal government by early February to prevent illegal mining and increase local supplies.

If the Orissa government's proposal is implemented, it could badly shrink India's iron ore exports that have already taken a beating owing to a ban by southern state Karnataka last July.

(Editing by Matthias Williams and Alex Richardson)

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