Karnataka mining: SC permits firms to export excavated iron ore

It also permitted mining firms to enter into direct contracts to lift excavated iron ore through inter-state sales

May 21, 2022 12:54 am | Updated 09:50 am IST - New Delhi

A file photo of mining activities at Devagiri hills near Sandur, Ballari district.

A file photo of mining activities at Devagiri hills near Sandur, Ballari district.

The Supreme Court on Friday permitted mining firms to sell outside the state and export already excavated iron ore from mines in the districts of Ballari, Chitradurga, and Tumakuru in Karnataka without having to resort to the process of e-auction.

A Bench comprising Chief Justice N.V. Ramana and Justices Krishna Murari and Hima Kohli took note of the stand of the Central government and lifted the curb on the export of iron ore and asked the firms to observe the conditions imposed by the authorities.

“Keeping in mind all the ... factors, we are inclined to favourably consider the prayer made by the applicants and grant them permission to sell the already excavated iron ore stock-pile at various mines and stockyards located in the Districts of Bellary, Tumkur, and Chitradurga in the State of Karnataka, without having to resort to the process of e-auction,” the 24-page order said.

It also permitted the mining firms to enter into direct contracts to lift the excavated iron ore through inter-state sales.

“We also grant permission to the applicants to export the iron ore and pellets manufactured from the iron ore produced from the mines situated in the state of Karnataka, to countries abroad, as is being done in the rest of the country, but strictly in terms of the extant policy of the Government of India,” the CJI, writing the order for the Bench, said.

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The apex court took note of the fact that the Union ministries of steel and the mines have supported the applications moved by the mining firms and have submitted that the mining scenario has improved considerably since the year 2018.

“We are in broad agreement with the stand taken by the Ministry of Steel, Union of India, and Ministry of Mines that it is necessary to create a level playing field for the mines situated in the districts of Bellary, Chitradurga, and Tumkur with others situated in the rest of the country,” it said.

It said records reveal that repeated attempts to resort to the e-auction process for the sale of already excavated iron ore mined in the three districts have not borne any fruitful results.

“As a consequence thereof, the large stock of iron ore, including sub-grade iron ore, is lying unused. As on March 31, 2022, the stocks available in category ‘A’ and ‘B’ mines are stated to be 82,98,130.5 MT. The stocks available in the auctioned category ‘C’ mines as on the above date is 12,25,100.5 MTs ... the closing balance of iron ore available in all the mines across the State of Karnataka as on 31st March 2022, adds up to 11,94,783.93 MT,” it said.

It agreed with the CEC which had said that the demand and supply and price of iron ore are best left to be determined by the market forces.

“Having regard to the course correction that has taken place, the regeneration post the ruinous damage caused to the environment and the various steps taken by the Government, we are of the opinion that the order passed on 23rd September 2011 deserves to be relaxed,” it said.

Additionally, it is a matter of record that consecutive e-auctions conducted by the Monitoring Committee have been receiving a poor response, and the sale of iron ore even at the reserve price is dismally low, it said.

It added that looking at the overall change in the outlook, the restrictions placed on the manner of conducting the sale of iron ore and fixation of the sale price need to be removed.

With respect to the submissions of the parties in relation to the lifting of the ceiling limit for the production of iron ore for mining leases in the three districts, it said, “We are of the considered opinion that it would be expedient to obtain an opinion from the Oversight Authority appointed by this Court...”.

The Bench urged the oversight authority to take inputs from the stakeholders, including the CEC and the Monitoring Committee, and to send his opinion to it in a period of 4 weeks and listed the plea for hearing in the second week of July.

Iron ore exports from Karnataka were banned in 2012 by the apex court with an aim to prevent environmental degradation and to ensure that the mineral resources of the state are preserved for future generations as part of the concept of intergenerational equity.

The order was passed on pleas of mining firms seeking the lifting of curbs on the sale and export of iron ore imposed earlier on account of rampant violations.

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