To ensure supplies for steel industry following mining ban

The Supreme Court has directed that 1.5 million tonnes from the existing stock of iron ore from various mining leases in Karnataka's Bellary, Chitradurga and Tumkur districts be sold every month to ensure adequate supplies for the iron and steel industry.

Earlier, the court banned mining in the three districts.

Interim order

On Friday, the Forest Bench comprising Chief Justice S.H. Kapadia and Justices Aftab Alam and Swatanter Kumar passed the interim order, accepting the report of the Central Empowered Committee (CEC) on the modalities to be adopted for sale and keeping accounts of the existing stock of about 25 million tonnes of iron ore.

The CEC said the quantity of 1.5 million tonnes would be sold through e-auction.

“The mining lease-wise/grade-wise reserve price will be fixed after taking into consideration the sale price obtained/fixed by the NMDC [National Mineral Development Corporation].” The steel and associated industries, which have been dependent on the iron ore from Karnataka, would be eligible to participate in the auction of supplies for their own use.

No middlemen, no exports

The CEC report said: “No middlemen/traders will be eligible to participate in the e-auction and no exports will be permissible; the pelletisation and beneficiation plants may participate in the e-auction provided the iron ore so purchased, after processing/value addition, is made available only to the steel and associate industries.”

A physical verification of the existing stock would be carried out before the auction to determine the quantity of iron ore of different grades available.

In respect of the leases found involved in illegal mining, no amount towards the sale price would be disbursed now, the CEC made it clear.

As for leases where no illegality had been found, 80 per cent of the sale price might be disbursed to the lease holders and the balance retained.

The court, while accepting the CEC report, clarified that its ban order would not apply to mining of manganese ores. Other aspects of mining in Karnataka would be taken up for hearing on September 16, said the Bench, which passed its interim order after hearing amicus curiae and Attorney-General G.E. Vahanvati and counsel for various parties.

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