The Supreme Court, which earlier suspended mining operations in the Bellary area, on Friday partially lifted the ban and allowed the public sector National Mineral Development Corporation to undertake mining in two leases to cater for the domestic market.
The Forest Bench of Chief Justice S.H. Kapadia and Justices Aftab Alam and Swatanter Kumar, however, rejected the plea by a private miners' association that private operators who had not violated any law be allowed to do mining.
Earlier, senior counsel Dushyant Dave, appearing for the association, said that the constitutional courtcould not pass orders in violation of contractual or statutory rights or perpetuate illegality.
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Counsel said mining could be allowed subject to certain safeguards as suspending the operations would have a devastating effect on the economy and on the families of employees. “You [court] should have stopped Reddys from mining. Why should we suffer when we are doing something legally? Why penalise us?”
The CJI, who was shocked on hearing this submission, told counsel: “We are not cancelling your rights. We are acting under constitutional principles and Article 21. Production will come later. We have to balance environment and your rights. We are not perpetuating illegality. What was your association doing all these years? Give us the EIA [Environment Impact Assessment] report, we will consider your rights. Time has come when you have to do scientific mining. How many companies have corporate social responsibility?”
Attorney-General G.E. Vahanvati submitted a report explaining how the Bellary mines were catering for the needs of domestic companies and exports. Out of a total production of about 200 million tonnes of iron ore, roughly 50 per cent was exported and 50 per cent was used for the domestic market.
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The Bench, after hearing counsel for various parties, said: “In order to balance the environmental concerns with economic development and keeping in mind the mandate of Article 21, including inter-generational equity, we are of the view that in extraordinary circumstances, the NMDC alone be allowed to operate its mines to the extent of providing one million tonnes per month commencing from August 6 till further orders.”
In respect of private and Karnataka State units, the Bench said it would consider allowing them to carry on with mining after the receipt of the EIA report.
The Bench directed that the macro-level EIA study be undertaken by the Indian Council of Forestry Research and Education (ICFRE) in collaboration with the Wildlife Institute of India, the FSI (the Forest Survey of India) and such other domain experts, as may be decided by the ICFRE in consultation with the Ministry of Environment and Forests (MoEF).
This would be in respect of Bellary district.
The Ministry would frame detailed Terms of Reference for the proposed study within one week. The study “shall also indicate whether the district of Bellary constitutes one single environmental unit or more than one unit with different degrees of environmental degradation. The report shall be submitted within three months.”
Royalty for Karnataka
Pointing out that Karnataka was losing revenue as it was not collecting royalty at market rates, the Bench said: “We make it clear that the State will charge royalty on the basis of 10 per cent of the current market value of the iron ore. The NMDC will maintain accounts in that regard. Today, Karnataka has been charging royalty at 10 per cent of the rates as determined by the Indian Bureau of Mines at the pithead.”
The order said: “The differential between that rate and the market rate will be accounted for by Karnataka and will be deployed for rehabilitation of the area concerned. No part of this production shall be exported outside India until further orders.
The NMDC will sell the production to the States in consultation with the Ministry of Steel, Government of India. Karnataka is directed to submit the reclamation and rehabilitation plan of Bellary district within three months.”