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Iron ore miners have urged the Karnataka government to remove the trade barriers, which are preventing them from doing business and export the raw material, an industry body official said on Monday.

"The state government should file an affidavit in the Supreme Court to lift the ban on exports of iron ore and abolish e-auction in the state for level-playing field," G. Santesh, Chairman (southern region), Federation of Indian Mineral Industries (Fimi), told IANS here.

In response to a writ petition by the Hubli-based NGO Samaj Parivartana Samudaya, the apex court in 2011 had banned miners in the southern state from exporting iron ore and pellets so as to first meet the needs of domestic end-users (steel and sponge iron plants).

"The state government has been losing Rs 8,000 crore annual revenue for over a decade due to the restrictive trade practices, while competitors in other states like Odisha are free to export their iron ore as per the Centre's Exim policy," asserted Santesh.

The annual revenue includes royalty and taxes which the miners pay to the state government for mining iron ore in the leased mines, located largely in Ballari district in the state's northwest region.

While end-users like steel plants are free to buy iron ore from any miner in the country or even import them, Karnataka mining firms are forced to sell the raw material only through e-auction on the top court's direction.

"As 45 million tonnes of iron ore are mined against the demand is for 36 million tonnes, we should be allowed to export the surplus 9 tonnes of the raw material and pellets to sustain our business," Santesh said.

The iron ore industry has the potential to drive socio-economic development and create hundreds of jobs in the state with policy amendments.

The apex court's appointed central empowered committee (CEC) has also recommended to the top court to ease the conditions it imposed on the local miners following the unearthing of the multi-crore mining scam by the state Lokayukta (ombudsman).

Expressing concern over the non-utilisation of the special fund set up over a decade ago on the apex court's direction, Santesh said the mining sector pays 35 per cent royalty and taxes on its income to the state exchequer.

"We have contributed Rs 2,336 crore to the DMF (District Mineral Fund) and a corpus of Rs 18,000 crore has ben accumulated over the last six years under the special purpose vehicle (SPV)," added Santesh.