1

2

Y.R. Ghorpade (His Highness Yeshwantrao Hindurao Ghorpade)(1908-1996)

Founder (1954)

Chairman and Managing Director (upto 1996)

“That by placing matters of such constitutional character for discussion and recommendations of the House, abundant evidence of the complete identity of interest between the Ruler and the People was demonstrated and clearly showed the constitutional basis of the entire administration.”

-Resolution passed by the Sandur Legislature when Instrument of Accession was executed between Y.R. Ghorpade, Ruler of Sandur and the Governor General of India in 1947.

“Sandur is an oasis in a desert…. The Ruler of a small State (Sandur) in South India has thrown open his temples to the Harijans. The heavens have not fallen.”

—Mahatma Gandhi, 1934

3

M.Y. Ghorpade(1931 – 2011)

Administrative Officer

Joint Managing Director

Managing Director

Chairman and Managing Director (upto 1999)

“All that we get (earn) from the soil of Sandur in one form or the other should be primarily used to benefit Sandur.... The Mining Lease is something that has to be held in Trust for the benefit of those who are working so hard for so many years, with so much faith and determination. This is not anybody’s private property, but a sacred social responsibility, in which each one of us has to function as Trustee for the toiling workforce.”

“I was able to win the full confidence of the labour who were convinced that nothing contrary to their common interest will be done, and everything will be done in the most transparent manner. This faith and commitment has remained at the core of the philosophy of the company and has not been eroded all these years. This is my greatest satisfaction in life.”

4

M.Y. Ghorpade teaching English to children of Sandur Residential School, Sandur.

5

S.Y. Ghorpade Asst. Plant Superintendent

General Manager (Plant)

Technical Director

Chairman and Managing Director (from 1999)

“I am not a trained teacher, but I certainly enjoy giving tips on precision and conciseness, be in writing or solving mathematical problems. In any methodology we must ask the question; ‘Why? Can it be simplified?’ The result should be an elegant solution.”

“Nothing like hard and sincere work makes for success and satisfaction in life. Good and ethical behaviour makes you a welcome addition to social growth."

“Disseminate information down the line. Confer responsibility with accountability. Don’t play favourites and lead by example... Embrace scientific temper; shun superstitious belief, maintain positive attitude.”

6

• Largest Manganese Ore Mines in the private sector of the country

• Proven reserves-40 Mt Iron Ore, 8 Mt Manganese Ore, 100 Mt BHQ

Mines

• First Mining operations date back to 1907• Lease over 7511 ha was first granted to SMIORE in 1954. Renewed over

4715 ha in 1974 and 3215 ha in 1994• Operations in 1758 ha of forest land and 247 ha revenue land. 1210 ha

reserved for future

Manganese Ore Sorting

7

“Although in case of a large number of mines, the mining operations do not follow any concerted or well thought out plan of development, there are a few bright exceptions. For example, the group of mines controlled by Manganese Ore India Ltd., M/s. Sandur Manganese & Iron Ores (P) Ltd., and few other companies have planned the layout of their mines in a systematic manner.”

—Vasudeva Committee Report, 1965

Drilling

8

Manganese Ore Mines

9

Iron Ore Mines

10

Iron ore loading at SDMG Siding

Ore Evacuation

• Well connected to two Railway Sidings: Swamihalli (SMLI) and Sunderambencha (SDMG) on the Swamihalli - Hospet BG Line, 12 km from mine head. Hospet is on the Guntakal – Hubli railway line

• Plan to install a 4.2 km gravity ropeway from Kammathuru Iron Ore Mines to Swamihalli Railway Siding. Environment friendly and pollution free transport

• Plan to also install ropeway/tube conveyors from Mines to Ranjitpura and Sunderambencha railway sidings

11

JMPL—Ore Beneficiation Plant at Nandihalli, Sandur

Ore Beneficiation

• JV with Jayalaxmi Minerals (Pvt) Ltd., Nandihalli, Sandur

• Capacity–1.2 Mtpa feed

• 56/58% grade Iron Ore enriched to grade 62/63%

• 62/63% Iron Ore concentrate, suitable for sinter/pellet

• Jig for upgrading Manganese Ore by 3 to 4% Mn

• R & D for BHQ and Manganese Ore beneficiation

12

Ferroalloys and Electricity

• Smelting facilities: 15 MVA (Tagliaferi, Italy) and 20 MVA (Elkem, Norway) submerged electric arc furnaces

• Products: Silicomanganese, Ferromanganese and Ferrosilicon

• 32 MW Captive Thermal Coal based Power Plant

• 220 mu of energy per year—160 mu for furnaces and 60 mu for sale

Ferroalloy Plant, Vyasanakere, near Hospet

13

32 MW Thermal Power Plant at Vyasanakere, near Hospet

14

Diversification – New Projects

• Steel Plant–1 Mtpa

• Iron Powder–1,00,000 tpa• Power Plant–80 MW

• Iron Ore Beneficiation Plant–1.7 Mtpa

15

Solar Power System at Girls Hostel, Sandur Polytechnic at Yeshwantnagar, near Sandur

Solar Power Project

• Production of Solar Photo Voltaic Modules and Assembly of Power Systems

• Power Systems for street lighting, homes, community centres, schools and hostels, drinking water pump stations, agricultural irrigation pump sets

• Powering villages and remote areas of mining buffer zones - Corporate Social Responsibility

Active Installations:

• 4 kW Power System at Girls Hostel, Sandur Polytechnic, Yeshwantnagar

• 7.5 kW Power System for street lighting of colony at Mining Camp, Deogiri

Solar Street lighting at SMIORE Staff colony, Mines camp, Deogiri

16

Sandur Laminates Plant for Manufacture of Solar PV Modules at Lakshmipur, Sandur

17

“As regards specific opinion of the undersigned on the request of the mine owner for reserving forest land, I would like to state that the area has been inspected by me and seen; and in short, the forests left to their care are quite safe and large areas deserve to be kept with them further. Considering the fact that the Sandur Taluka forests need to be protected carefully, as several large number of small lease areas existing in this zone have already made adverse impact on Forest wealth, I, in the interest of maintaining ecology in this zone, recommend again for sanction of this large area to the party in the best interest of preserving the forests and fauna.”

—Conservator of Forests, Bellary, to PCCF while recommending renewal of SMIORE’s lease.

Plantation at Deogiri

18

Dump Management, Kammathuru Iron Ore Mines, Deogiri

“It is observed that (a) the joint team has not found any illegality vis-a-vis the sanctioned lease boundaries (b) the owners of the Lessee Company have voluntarily handed over more than 2000 ha of forest land owned by them to the State Government and which has no parallel in the State, and (c) the Lessee Company has an excellent track record of undertaking mining operations in accordance with the law.”

—CEC & Joint Team constituted by Hon’ble Supreme Court of India, 2011-2012

19

Silt-Settling Tank

• Mining Lease Hold area: 1758 ha Forest Land, 250 ha or 14% maintained as forest cover, with plantations, nurseries and avenue trees

Environment Protection, Afforestation, Reclamation and Rehabilitation

• 30 lakh trees planted from 2000 to 2013

20

Avenue Plantation

Toe Wall and Drain

21

Cement Masonry Retainer Wall

22

SMIORE's Supplementary Environment Management Plans (SEMP)

Budget: 1st year (2012-13) `28 crore

2nd and 3rd year `9 crore

4th to 16th year `34 crore

Total `71 crore

Toe Walls 17000 metres

Drains 26500 metres

Greening & Consolidation of Dumps 150 ha

Retaining Walls 13000 metres

Plantation in Mining Area/Safety Zone 90 ha

Silt Settling Tanks 60 Nos.

Check Dams135 Nos. 3350 metres

Rainwater Harvest Pits 50 Nos.

Gulley Plugs 215 Nos.

Rain Water Harvesting

23

Cement Masonry Retainer Wall and Dump Plantation

Dry Masonry Retainer Wall and Drain

24

• Support to 16 Schools and Colleges with 5500 students and 250 teachers

• Sandur Polytechnic, Yeshwantnagar (Estd: 1988)

• Sandur Residential School, Sandur (Estd: 1959)

• Sandur Girls Residential School, Vyasanakere, Hospet (Estd: 1991)

• SMIORE Vyasapuri Junior College, Vyasanakere, Hospet (Estd: 1991)

• One High School and Two Primary Schools in Deogiri and S.B. Halli Mining Camps

• High Schools and Primary School at Ferroalloy Plant, Vyasanakere

• Two High Schools (including one exclusively for Girls), two Junior Colleges (including one exclusively for Girls) and One Primary School at Sandur

• M.Y. Ghorpade Freeships for 50 boarders (merit-cum-means) for studies in Sandur Residential School

• SMIORE scholarships (merit-cum-means) for 200 children in SRS/SGRS and 200 children in Sandur Polytechnic

• Training Institute for better employability of youth–Vocational training such as Carpentry, Plumbing, Computer Operation, Welding, Electrical Wiring, Masonry and Horticulture

• MYG Special Training Centre for Eradication of Child Labour

• Free Mid-day meals (through Akshaya Patra) for 1200 children in schools in and around Sandur

School children-Deogiri

School Assembly at Deogiri

Corporate Social Responsibility—Education

25

Mid-day Meals for School Children

M.Y. Ghorpade Bal Bhavan, Sandur Residential School

26

Sandur Polytechnic - Mechanical Engineering

27

Abacus - Computer Centre, Sandur Polytechnic

Sandur Girls Residential School, Vyasanakere

28

Eye Care at SMIORE Arogya Community Health Centre, Sandur

Corporate Social Responsibility—Health

• Full-fledged hospital at Sandur – Arogya Community Health Centre

• Specialized eye care (40 beds) and regular Cataract camps

• Specialty camps every Sunday

• Annual Health Camps for Cancer detection, Woman and Child care, Cardiac care, Pediatrics, Orthopaedics and ENT

• Financial help for needy people for advanced medical care in cases of major ailments

29

Adarsha Community Centre & Kalyana Mantapa

Houses for flood victims in Siruguppa Taluka, Bellary District

Music concert by Late Pt. Bhimsen Joshi at Adarsha Concrete Road - Sandur to Kumaraswamy Temple (in association with others)

Corporate Social Responsibility—Area Development

• Construction of roads

• Construction of houses for victims of floods

• De-silting of tanks in buffer zone

• Compensation to farmers for drought, floods, dust pollution

• Fire accident relief – food grains, cloth and cash

• Community Hall at Sandur for marriages, seminars, concerts

• Contributions for development works in the District

30

Khadi Weaving at Sandur Kushala Kala Kendra

Corporate Social Responsibility—Fine Arts

• Sandur Kushala Kala Kendra (Established 1984)

›› Well-known Handicraft Centre of India

›› One of the three Art and Craft Centres of India recognized by Aid to Artisan, USA

• Gainful employment for 300 women artisans (Mirror and Embroidery), mostly from backward tribal community

Tailoring Traditional Lambani Mirror & Embroidery at Sandur Kushala Kala Kendra

• Nurturing and Protecting traditional craft and fine art

• Lambani Mirror and Embroidery, Stone Carving, Bamboo and Cane Works

• Exporting Mirror and Embroidery, Needle and Thread Work to USA, Australia, Japan, Netherlands and UK

• Promoting Khadi – Spinning, Weaving and Dyeing

31

Food Security - Supply of Ration

Employee Welfare

• For 3000 direct and indirect employees

• Many second and third generation in employment of the company

• Largest Technical manpower in private sector mineral mining

• Priority for right to food, clothing, housing, medical care and education

• Food Security – All employees given ration cards for monthly supply of essential commodities at highly subsidized rates

• Food package, (`115 at 1972 prices), sufficient for average family of 5 for a month

• Difference in market price (`2600/card in 2014) and price paid by employee (`115) borne by Company as subsidy, i.e., about `2500 per employee

• Housing Loan - 60 times salary @ 1% interest, repayable over 15 years

• Cash gift for clothing - `2000 to `12,500 to every employee every year

• Subsidized LPG (cooking gas) - 8 cylinders a year at 40% to 75% subsidy over Govt. subsidized rates

• Free solar heated water

• Free Electricity to employees in Company Colonies

• Dispensaries and Hospital at Mining Camps, Deogiri & S.B. Halli

• Medical expenses entitlement - 20% of annual salary every year

• Generous and almost full reimbursement of cost of treatment/surgeries in case of major ailments

• Festival gifts for Ugadi, Deepavali, Ramzan and Christmas

• Cash gift for marriage of children - `10,000 to `1 lakh

• Scholarships to meet total fee (based on Government fee) for PUC, Degree courses, Engineering, Medicine

• Scholarships for study in Sandur Residential School, Sandur Polytechnic and SMIORE PU College

• Financial help in the event of death in family

Item Quantity per month (Kg)

Price (` / kg)

Paid by employee per card (`)

Rice 25 2.00 50.00

Jowar (W)

(H)

20

27

1.00

0.7520.00

Tur Dal 3 2.20 6.60

Dry Chillies 1 4.60 4.60

Jaggery 2 2.00 4.00

Ground Nut Oil 2 6.50 13.00

Gram Dal 1 2.00 2.00

Wheat 5 1.75 8.75

Rava 2 3.00 6.00

Total 115.00

32

’See Sandur in September’

33

A Saga of Commitment to Sustainable Development in the cause of Society- a safe and good future for employees and their coming generations.

Sandur – an Oasis Mahatma Gandhi had once described the picturesque valley of Sandur as an oasis. Sandur, a historical town in Bellary District of Karnataka State, endowed with mineral wealth, is known for its sylvan beauty. Very appropriately, on the rampart atop the gorge at the western entrance to the valley of Sandur it is written “See Sandur in September”.

PromotersThe Sandur Manganese & Iron Ores Limited (SMIORE) was founded in 1954, as a Private Limited Company, by the former Ruler of the Princely State of Sandur, Y.R. Ghorpade (Yeshwantrao Hindurao Ghorpade), to scientifically develop the Manganese Ore and Iron Ore mines. The Mining Lease granted to him was over an area of about 7500 hectares (ha).

As Ruler of Sandur from 1928 to 1949, Y.R. Ghorpade had introduced many progressive administrative measures and reforms, including throwing open the ancient shrine of Lord Kartikswamy to all castes. Mahatma Gandhi on learning about this when he visited Sandur in 1934 had remarked “A small State in South India has thrown open the temples to the Harijans. The heavens have not fallen.”

M.Y. Ghorpade (Murarirao Yeshwantrao Ghorpade), eldest son of Y.R. Ghorpade, was associated with the management of the Company from its

inception. M.Y. Ghorpade represented Sandur in the Karnataka Assembly for about four decades and also served as Karnataka’s Finance Minister and Rural Development & Panchayat Raj Minister. He nurtured and developed SMIORE into one of the finest professionally managed companies of India, doing business in the fields of Manganese Ore, Iron Ore, Ferroalloys and Power. Armed with an Economics Tripos Master’s degree from Cambridge, M.Y. Ghorpade was known for his forthrightness, integrity and diligence in whatever responsibility he was entrusted with. Noteworthy are his contributions in streamlining the budgeting and income & expenditure of the finances of the State. He is still remembered for his contribution in effective implementation of the Panchayat Raj Act and devolution of powers in the three-tier administrative and governance system. He strived hard to formulate and ensure the reservation system in local body elections, especially one-third reservation of seats for women. M.Y. Ghorpade was an accomplished wildlife photographer of rare distinction, a profound lover of nature and author of some wonderful books on nature, history, economics, rural development, Panchayat Raj and education.

While Y.R. Ghorpade, the former Ruler of Sandur, after having assented to merger of the Sandur State with the Union of India, had the foresight and passion for establishing an industry in the organized sector for creating employment, M.Y. Ghorpade was committed to ensure that running and management of the Company results in development of the region for the benefit of the people of the area, providing a good return to the shareholders of the Company, and

34

passionate welfare of the employees and their families. He firmly believed that a major part of what the industry earns must go back for development of the area in which it is situated, to the betterment of the livelihood of its employees and to secure a safe future for their children. His sustained effort of socio-economic reconstruction and service, over the years, has set the tone and road map for the Company’s progressive growth.

S.Y. Ghorpade (Shivrao Yeshwantrao Ghorpade), younger brother of M.Y. Ghorpade, is a Metallurgical Engineering graduate from the renowned Colorado School of Mines, USA. S.Y. Ghorpade is recognized as one amongst the most eminent metallurgical engineers of the Country and was largely responsible in building the Company’s Ferroalloy Plant from scratch to one of the finest Plants in India. Essentially a scientist to the core, S.Y. Ghorpade has presented many Papers of significance at National and International Seminars, and is also Chairman of Sectional Committee of the Bureau of Indian Standards for Pig Iron and also for Ferroalloys and Manganese Ore. Science and the scientific temper, being deeply embedded in him, S.Y. Ghorpade whose passion of life is proper application of science, is now Chairman & Managing Director of SMIORE and actively engaged in the Company’s critically vital diversification activities such as setting up a integrated Special Alloy Steel Plant, Iron Ore and Manganese Ore beneficiation, environment friendly ore transport systems, solar power systems, and captive thermal power plants to support and ensure long term viability of the ferroalloy operations.

MiningManganese was discovered in the Sandur hills as early as in 1838. The ore was mined by a foreign company from 1907 till 1953. The old workings and pits, though long abandoned, are still visible in parts of SMIORE’s lease hold area. Y.R. Ghorpade, the former Maharaja of Sandur, after he merged the Sandur State with Union of India, was awarded a mining lease over an area of 7500 ha. He founded the Sandur Manganese & Iron Ores Limited and the Lease

was transferred to the Company. Out of this, 2800 ha of area which was largely Iron Ore bearing, was deleted when the Company’s Lease was renewed in 1974 and retained by the Government with the intention of reserving it for mining by Public Sector. Unfortunately, quite contrary to prior intentions, most of this area which is rich in Iron Ore was leased to other private entrepreneurs. SMIORE’s Lease was renewed in 1974 over an area of 4700 ha. During the second renewal, the Company voluntarily surrendered another 1500 ha of forest area which did not seem to hold much mineral reserves, and SMIORE Lease was renewed over an area of 3200 ha with effect from 1st January 1994. Founder Y.R. Ghorpade, magnanimously and with a view to ensure better protection and development of forest in the area, had in 1980 handed over (rather gifted) about 1600 ha of his personal property (even though he had mining rights in the same as per the Merger Agreement). Clearance under Section (2) of the Forest Conservation Act, 1980, was obtained by SMIORE to work in 2005 ha (out of 3200 ha of ML area), and the balance of about 1200 ha forest area is being reserved for future use. Reserves in SMIORE Lease area are estimated at about 40 million tonnes (Mt) of low grade Iron Ore, about 8 Mt of low grade Manganese Ore and nearly 100 Mt of BHQ.

As per the new norms for determination of production capacities, SMIORE would be entitled to mine about 2 Mtpa of Iron Ore and, perhaps about 0.4 Mtpa of Manganese Ore after establishing reserves under the United Nations Framework Classification (UNFC).

SMIORE’s Low Grade Manganese Ore is known for its low phosphorus content (below 0.05%) and has the unique reputation of being one of the finest low grade, low phosphorous metallurgical ores and used in blends for manufacture of ferroalloys and steel.

SMIORE has always laid special emphasis on scientific mining, safety, afforestation and environment protection. SMIORE has won several awards for

35

safety and environmental protection at the State and National levels. SMIORE’s culture and philosophy of utmost regard and respect to the various statutes and rules of mining, has held the Company in good stead.

The Government of India had appointed a committee, popularly known as Vasudeva Committee to study Manganese Ore Mining Procedures in India. The Report of the Committee, published in 1965, significantly noted:

“Although in the case of a large number of mines, the mining operations do not follow any concerted or well thought out plan of development, there are a few bright exceptions such as mines controlled by Manganese Ore India Limited, M/s. Sandur Manganese and Iron Ores Limited and a few other companies who have planned the lay-out of their mines in a systematic manner.”

Recently, during 2011-12, after carrying out a detailed investigation into “illegal mining”, the Central Empowered Committee (CEC) and the Joint Team appointed by the Hon ble Supreme Court of India said in their Report to the Supreme Court:

“...the joint team has not found any illegality vis-a-vis the sanctioned lease boundaries, (b) the owners of the lessee company have voluntarily handed over more than 2,000 ha of forest land owned by them to the State Government and which has no parallel in the State, and (c) the lessee company has an excellent track record of undertaking mining operations in accordance with the law.”

The findings of the Supreme Court appointed team for investigation of illegal mining, in as far as SMIORE is concerned, is a matter of great satisfaction and re-assurance of its policy of “business with ethics and values”. More so, when considering the fact that SMIORE’s Lease covers an area of

about 50% of total area of 22 Mining Leases classified in category ’A’ (which were found to be involved in no or minimum illegalities). Naturally, SMIORE has always been considered to be one of the best mining companies in the State of Karnataka.

Manganese Ore BeneficiationOwing to the increasing paucity of high grade ore for ferroalloy smelting, the Company had long since decided to commission a pilot plant for enriching its low grade Manganese Ore (30% Mn/25% Fe) to high grade ore (34% Mn/ 8% Fe). The close interlocking of the oxides of Mn and Fe in the low-grade ferruginous Manganese Ore, necessitates selectively magnetizing the Fe2O3 to Fe3O4 by roast-reduction with coke in a rotary kiln (2tph). After grinding the product and subjecting it to dry and wet high-intensity magnetic separation, the interlocked oxides are liberated. While both Mn and Fe oxides can be sintered, the magnetic fraction can be alternatively marketed for applications such as heavy media separation and anodized protection of marine pipelines. Sinter of enriched Manganese Ore would be an ideal substitute for high grade ores for Manganese alloy (FeMn and SiMn) production.

The roast-reduction route for enriching the low-grade Manganese Ore, which is in abundance and incidental to mining higher grades, if proved viable, can become an attractive commercial proposition and has far reaching significance in the national context. Justifiably, for conserving scarce high grade reserves and exploiting the low-grade ores, SMIORE plans to use the Pilot Plant for beneficiating some low grade ores from its own Mines for use in blend for FeMn and SiMn production for the present; and in due time, set up a full-fledged Beneficiation Plant with roast reduction and magnetic separation facilities on a commercial scale.

Iron Ore BeneficiationThough almost all the potential Iron Ore bearing areas were deleted from its

36

Lease Hold, even the predominately Manganese Ore bearing areas contain some low grade Iron Ore in the intervening traverse regions, whose reserves are estimated to be in the vicinity of about 40 Mt.

SMIORE has identified and plans to acquire, after sustained trials and a feasibility study, a beneficiation plant located close to its Mines, to upgrade its ores from 56%-58% to 62%-63% Fe grade. Sample studies indicate that the process would entail crushing, screening, washing, jigging and magnetic separation. The enriched output concentrate (62%-63% Fe) would be suitable for both sinter and pellet production, with yields of 75%-80%. While SMIORE has adequate land and water required for setting up such a Beneficiation Plant at its ferroalloy plant premises at Vyasanakere, near Hospet, SMIORE has also entered into a facility leasing agreement to use the said 1.2 Mt per annum beneficiation plant, which if found to be feasible, is proposed to be acquired and further investment made in it to make it more suitable for effective beneficiation. Perhaps, the vast reserves of BHQ and low grade Manganese Ore fines could also be beneficiated in this Plant, with suitable adaptations and additional equipment.

RopewaysPoor infrastructure, severely damaged roads, inadequate rail carrying capacity, and undue pollution, consequent to heavy transportation of ores, are matters of great concern to the mining industry. Determined to combat this deteriorated condition, SMIORE has decided to revive its Ropeway system. The Company has obtained Government approval to set up a 4.2 km ropeway from its Iron Ore mines at Kammathuru (Deogiri Group of Mines) to the railway siding at Swamihalli, for onward rail movement to various destinations of end users or to the Company’s Ferroalloy Plant premises at Vyasanakere, near Hospet. The project will result in considerable lowering of transportation cost, besides gaining qualitative benefits of cleaner air and enhanced safety.

SMIORE plans to set up more Ropeways and also Conveyors in the future, from its other Manganese and Iron Ore mines to the SDMG and the Ranjitpura Railway Sidings.

FerroalloysWith firm belief in value addition and significant contribution to industrial development of the region, SMIORE was converted into a Public Limited Company in 1964, in order to establish an electro-metallurgical industry and diversify its activities into production of pig iron and ferroalloys using the Iron and Manganese ores from the mines. SMIORE set up a ferroalloy plant in 1968. In deference to the suggestion by the Government, and with an assurance from it and an agreement with the State Electricity Board for supply of adequate power at a viable tariff, SMIORE ventured into production of foundry grade pig iron production. In 1977, with addition of two more 20-MVA furnaces, the plant was diversified into production of Ferromanganese, Ferrosilicon, Silicomanganese and Ferrochrome. By 1980, SMIORE’s Metal & Ferroalloy Plant at Vyasanakere, near Hospet, was recognized as one of the finest metallurgical plants of the country. It gained a reputation for supplying quality low-phosphorous pig iron to the Indian foundry industry, especially for quality-conscious automobile industry, and also ferroalloys to SAIL and other steel plants in India and overseas.

During the nineties, operation of the furnaces and production of ferroalloys became unviable entirely due to inadequate supply of power, coupled with an unviable tariff. The Plant had to be shut down completely by the year 2000.

A spurt in the demand for even low-grade Manganese Ore and iron ore turned the fortunes of the Company from 2007-08 onwards. This enabled the Company to obtain majority stake in Star Metallics and Power Private Limited (SMPPL), which had earlier been set up by ETA of Dubai and others who had purchased

37

SMIORE’s ferroalloy plant, which has capacity to produce about 45000 / 60000 / 20000 tonnes of Silicomanganese / Ferromanganese / Ferrosilicon.

PowerTo alleviate the double disadvantage of high cost and non-availability of adequate power, which was experienced in the past, SMIORE has made investment in SMPPL to install a 32-MW Thermal Power Plant, to meet the entire power requirement of the two furnaces (one 15 MVA Italian Tagliaferi and one 20 MVA Norwegian Elkem).

The power plant has capacity to generate about 220 mu of saleable power per annum. While the two furnaces together may use about 160 mu of power for ferroalloys production, 60 mu of surplus power is available for sale in the open market. SMPPL has been granted by the Central Government a coal linkage with Singareni Collieries. To ensure trouble free operations, a blend of Singareni and imported coal is used. The Company is also trying to identify and invest in a suitable and viable coal concession in Indonesia, to meet its requirement of coal to operate the power plant.

To further strengthen its ability for future diversification into additional ferroalloys, beneficiation of Iron Ore and Manganese Ore, and also steel production, SMPPL has obtained approval from the Karnataka State Government for setting up one more 40 MW thermal power plant. The proposed steel plant also envisages a 40 MW power plant using flue gases from the blast furnace and coke oven batteries.

In all, the Sandur Group should eventually have an internal power generation capacity of about 112 MW.

Integrated Steel PlantThe Company has plans to pursue its policy of value addition further. Hopefully,

the Iron Ore reserves may be augmented if at least some of the Iron Ore bearing areas, deleted from its earlier Lease Hold, is restored by the Government by favourably considering pending application for sanction of Lease of about 200 ha of such deleted area. SMIORE plans to set up an integrated plant to produce 1.0 Mt of steel, which would include a sinter facility, coke oven battery, 40 MW waste heat recovery power plant, mini blast furnace, basic oxygen furnace, ladle refining furnace, vacuum degassing, continuous casting and a rolling mill. The Company already has some land and water allotment at the Ferroalloy Plant premises in Vyasanakere, near Hospet. Acquisition of additional land and increase in water allotment from the Tungabhadra reservoir would meet all the requirement of the iron ore beneficiation plant as well as the integrated steel plant. Plans are afoot to also set up a powder metallurgy plant, in collaboration with a reputed multinational company for use of about 100,000 tonnes of liquid steel for production of powder iron, to be located in the same premises.

Pending establishment of the integrated steel plant, SMIORE has joined hands with Shimoga Steels Ltd (SSL) for production of steel ingots and TMT bars. About 1.5 lakh tonnes of Iron Ore could be used for production of ingot steel or sponge iron on a conversion basis and then upgraded to TMT steel bars. This project is at an advanced stage of implementation by refurbishment of the available facility of SSL to produce about 75,000 tonnes per annum of TMT bars.

Solar PowerSMIORE has undertaken R&D work to make necessary alterations and devise a process for production of Photovoltaic Modules (PVM) for generation of solar power, by use of the equipment at the Sandur Laminates Limited (SLL), a SMIORE subsidiary which had been earlier set up for manufacture of copper clad laminates. It has been established that the facility could annually produce PVMs equivalent to about 20 MW of power. Demand for PVMs in India is growing.

38

Demand in Europe is enormous. Manufacture of PV Modules for export as well as domestic sale is expected to start soon. This project is of significance as it would be in the field of renewable energy, which has assumed national importance.

With manufacture of PV Modules at the Laminate Plant, SMIORE plans to design and assemble Stand-alone Solar Power Systems with bought out components like inverters, batteries, light fixtures, cables etc. As part of trials, PV Modules were manufactured at SLL and Solar Power Systems have been designed, assembled and set up at the Girls Hostel in the Sandur Polytechnic, Yeshwantnagar. A Street Lighting System has also been set up in SMIORE’s Labour Colony at Deogiri Mines. These units have been running successfully, providing free power to the Girls Hostel and the Labour Colony.

Bolstered with this success, as part of R&R or the Supplementary Environment Management Plan and the proposed plans for rehabilitation and developmental works in the Mining Impact Zones, SMIORE has plans for very pertinent and beneficial development activities in the “buffer zone” around its mines, which comprises of 22 villages and also the town of Sandur. Manufacture and assembly of stand-alone solar energy based power systems would play a very vital and meaningful role in this direction.

SMIORE proposes to include in its CSR and R&R Plans, Solar Power projects such as Home Lighting, Street Lighting, Community Centre Lighting and Students Hostel Lighting. Importantly, these are ‘Green Energy Projects’. SMIORE also proposes to take up, on an experimental basis, solar powered water pumping stations for Drinking Water Plants in the villages and also Irrigation for agriculture. These initiatives will go a long way in providing free and uninterrupted power supply to remote villages, much necessary street lighting in villages, power during day time to pump water for drinking and irrigation of agricultural lands.

SMIORE will take up at its own cost as part of CSR, some of these installations to make a beginning. Obviously, the demand will increase multi-fold with successful implementation of these projects. If similar projects are proposed in the whole of Bellary District, and also in Tumkur and Chitradurga Districts of Karnataka, which are the other areas which come under the Mining Impact Zone, the demand would be huge, and the facility at SLL could be used very effectively and beneficially.

Environment Protection, Afforestation, Restoration & RehabilitationSMIORE’s Mining Lease comprises of about 2005 ha, out of which about 1760 ha is forest land (the balance 245 ha being revenue land, most of which houses the company’s labour colony, offices, schools, hospitals, etc.). SMIORE has developed and nurtured tree plantations (forest cover) over an area of about 250 ha of valuable mining area, with its own nurseries to support regular supply of saplings. Over the last 15 years, SMIORE has planted over 30 lakh trees, with about 60% survival rate, which by far exceeds the statutory requirement. Nearly 10,000 bamboo trees planted by SMIORE during 1990 for reclamation of land used for mining in S.M. Block have become a model site which is much appreciated by the Forest Department.

SMIORE’s mining lease lies in a hilly terrain. To prevent soil erosion, contain dumps from being washed away by rains, and to prevent the lakes in the nearby region from being silted, the Company has been carrying out regular environmental protection works for the last 4 to 5 decades and has constructed several check dams, gully plugs, drains, toe walls, etc. SMIORE has since long initiated steps to re-charge ground water through rain water harvesting methods. The water stored in the harvesting pits is being used for applications such as dust suppression, and greenbelt development.

Indian Council of Forestry Research & Education (ICFRE) Dehradun has

39

Corporate Social ResponsibilityDevelopment of the area, maintenance of social and communal harmony, nurturing of cultural heritage, traditions and fine art, and protection of the Indian family values, have always been at the heart and core of the ethos and philosophy of SMIORE and its promoters.

The Sandur Manganese & Iron Ores Limited has always been and will continue to be managed and run with the same ethos of good governance, fair-play and righteousness. The Company’s main accumulation of wealth over the last six decades of its existence has been “goodwill”. The Company started only as a mining project way back in 1954. Along the way, the Company in its endeavour to play its part in industrialization of the region and for better future of its shareholders and employees, set up a metallurgical industry for production of Pig Iron and Ferroalloys, facilities to produce high tech electronic products such as Resistor Networks, Copper Clad Laminates, Dosing Pumps, Dot Matrix Printers, Software Development, and Hydel and Thermal Power Plants.

With societal needs in mind and as part of its Corporate Social Responsibility, SMIORE has consistently done its bit in the welfare of the area and the surrounding villages. Education and Health are the thrust areas in which SMIORE has paid special attention. Some of the noteworthy social service activities of the Company are as follows:

• Support to educational institutions, Primary Schools, High Schools, Pre–University Colleges and a Polytechnic, which together represent about 5500 students and about 250 teachers

• Scholarships for studies to needy and meritorious students

• Free Vocational Training for Better Employability to local boys and girls in trades such as Electrical Wiring, TV Repair, Welding, Fitting, Plumbing, Carpentry, Masonry, Horticulture and Computer Operation

• Aid to Special Training Centre for rural children’s education and prevention

prepared in 2012 the Supplementary Environment Management Plan (SEMP) or known generally as Reclamation & Rehabilitation Plan (R&R) for SMIORE, which the Company is right earnestly and diligently implementing. The total budget for the SEMP (R&R) of SMIORE is about ` 71 crore. The quantum of the R&R related works are estimated to be about 17,000 Metres of Toe Walls, 13,000 Metres of Retaining Walls, 26500 Metres of Drains, 60 Silt Settling Tanks, 135 Check Dams, 50 Rain Water Harvesting Pits, 215 Gully Plugs, Consolidation and Greening of 150 ha of surface of over burden (Waste) Dumps, and 90 ha of Green Belt, Safety Zone and Avenue Plantations.

In rural India, firewood continues to be the chief fuel for cooking. To provide residents of the Company’s mining camp colonies alternate fuel for cooking and save firewood, SMIORE supplies 8 LPG cylinders per year to its employees with 40 to 75% subsidy over the Government subsidized rates. The Company also provides free electricity and hot water (from solar water heaters) to resident employees, and has set up Solar Power street lighting system in the colony.

In his communication dated 18 October 1993 to the Principal Chief Conservator of Forests, while recommending renewal of SMIORE’s lease, the Conservator of Forests, Bellary, wrote:

“As regards specific opinion of the undersigned on the request of the mine owner for reserving forest land, I would like to state that the area has been inspected by me and seen; and in short, the forests left to their care are quite safe and large areas deserve to be kept with them further. Considering the fact that the Sandur Taluka forests needs to be protected carefully, as several large number of small lease areas existing in this zone have already made adverse impact on Forest wealth, I, in the interest of maintaining ecology in this zone, recommend again for sanction of this large area to the party in the best interest of preserving the forests and fauna.”

40

of child labour; cash incentives to such parents to leave their children for study in such schools

• Free mid-day meals for about 1200 school children in neighbouring schools

• Dispensaries and hospitals in employee colonies and also almost a full-fledged hospital in Sandur, with special emphasis on eye care, woman and child care, and regular specialty treatment camps by expert doctors. Free eye camps 3 to 4 times every year. Financial help and arrangement for medical care to patients from poor families suffering from major ailments

• Construction of houses for flood affected victims

• Contributions for development works in Bellary District

• De-silting of lakes around the mines

• Repair and Construction of roads

• Support to the Sandur Kushala Kala Kendra (SKKK) for nurturing traditional art and craft and for creation of opportunities for supplemental income to dependents of employees and local artisans, especially tribal and backward women of the area

• A beautiful multipurpose hall, Adarsha Community Centre, provided almost free of charge to employees and local population of Sandur, for marriages and other events

• Immediate relief to fire accident victims of surrounding villages by way of free cloth, food grains, etc

Employee WelfareA fact of historical and noteworthy importance is that during the difficult and turbulent times SMIORE went through from 1998 to 2007, hardly any employee left the Company for “better opportunity”. As part of implementation of the Rehabilitation Scheme approved by BIFR, the Company conscientiously retained only the Mining Lease, and sold everything else only to save the mines and the more than 2000 persons working there. These persons have been working

for the Company for decades. Children and grandchildren of some of the first employees are now working for the Company. It is a matter that should make any Promoter, Entrepreneur or Shareholder proud and give unlimited satisfaction.

The secret of continuing loyalty, sincerity and diligence in every employee of the Company, is the persistent concern the Promoters of the Company have shown to its employees and the conceptualization and formulation of all the labour and social welfare schemes. Late Ruler and Founder Y.R. Ghorpade, and then M.Y. Ghorpade, at the helm of affairs from the very inception of the Company, have unflinchingly striven to give every employee a sense of belonging, security and above all, affection. Even when the Hon’ble Supreme Court ordered a general suspension of mining activity in Karnataka, which resulted in SMIORE’s operations coming to a complete stand still for 18 months from August 2011 to February 2013, not a single worker was retrenched or for that matter denied his full salary.

SMIORE has become known as an enlightened employer and has been employing thousands of workers since 1954 and even today has about 2000 employees on its rolls (in fact, about 3000 direct and indirect employees). SMIORE’s technical manpower could be rated as one of the best and the largest in the private mining sector in the country.

Besides statutory welfare schemes such as Provident Fund and Gratuity, the Company, has several very innovative welfare measures which hinge around the basic essentials of every human being. Food, Housing, Clothing, Medical Care and Education, have received due priority.

SMIORE has laid special emphasis on maintaining its operations as labour intensive, which is the ethos of India’s original industrialization and development plans; and of course welfare of its employees has always received special attention.

41

Some of its employee welfare activities are as follows:

• Annual cash allowance to all its employees for clothing, ranging from ` 2,000 to ` 12,500 based on category

• Housing loan equivalent to 60 months’ salary at 1% interest, returnable over 15 years. As a result, almost all employees of SMIORE have their own houses in Sandur or in their native places

• Supply of 8 LPG cylinders per annum, for cooking, with 40 to 75% subsidy depending on cadre (higher subsidy for lower cadre) over Government subsidized rates

• Free electricity and hot water supply arrangement for residents of Mines Camp Colonies

• Almost free quarters in Mining Camp colonies for more than 1200 employees, in addition to House Rent Allowance ranging from 25% to 85% of basic + DA. Only a nominal rent is charged for houses allotted in the colonies

• Entitlement of 20% of basic + DA, towards medical expenses, apart from free medical facilities at AROGYA in Sandur and dispensaries in Mines and additional generous financial help for specialized medical treatment for major ailments

• ` 1,000 festival gift to all employees on each occasion of 4 festivals in a year, Ugadi, Deepavali, Ramzan and Christmas

• To employees’ children (limited to two) marriage gift ranging from 10,000 to ` 1.00 lakh, based on cadre

• Educational scholarships to children of employees and also other deserving children from needy families of surrounding villages and Sandur, to cover entire Government prescribed fees for PUC, Degree studies and also Engineering and Medicine Courses. Free schooling for employees’ children in Company run schools and also other premium schools and colleges of Sandur

• Financial and other help in the event of death in the employees’ family

• And the Company’s most important welfare scheme; food security and right to food. A unique and premium welfare scheme, talked about by many, which by and large is the single biggest reason for a SMIORE job to be so much sought after and gives the family basic security to live honourably. Every employee of the Company, be it a Ore Production Gang Worker, a Peon, Clerk, Officer, or the General Manager, is given a Ration Card which entitles him or her to a package of essential commodities every month, which would generally cater to the food requirement of a family of four-five for a whole month

This package of various food items is given to every employee during the third week each month, at only about 115 per package, which corresponds to prices prevalent in 1972. At today’s cost, (2014) this package of essential commodities costs about ` 2,600. The difference of ` 2,500 is the subsidy borne by the Company. Three years ago, the subsidy was about ` 800 per package, whereas presently it is nearly three times. In effect, the subsidy has risen progressively over the last four decades and risen by a significant 2000% compared with 1972 cost. None of the employees would even be aware of the market price of these commodities as they are effectively insulated from inflation. The monthly cost incurred by the Company towards subsidy on supply of food grains, is presently about ` 50 lakh (` 6 crore per annum) which is justifiably spent by the Company on this beneficial and popular welfare scheme for its employees, and in essence truly provides Food Security.

42

43

Lambani women at Sandur Kushala Kala Kendra

44

Regd. Office: Lakshmipur, Sandur-583 119, Bellary District, Karnataka, INDIAEstd: 1954

Des

igne

d by

Ele

men

tD.c

om