Iron ore exports from Karnataka can soon become a thing of the past, if the state government implements a key recommendation of the Lok Ayukta (ombudsman) regarding a complete ban on export of the commodity.
Former Lok Ayukta N Santosh Hegde, in his final report on illegal mining (based on the findings of U V Singh, chief conservator of forests), submitted to the state government on July 27, had strongly recommended a complete ban, considering the fast depletion of iron ore resources. Following a ban by the state government, no iron ore export has taken place from the state since July 26, 2010.
“As pointed out by the deputy director (mines and geology), Hospet, it is shocking to note that most leases will be running out of iron ore deposits having ferrous content of 60 grade in 3-12 years,” Hegde said in his report.
It may be recalled that on April 5, the Supreme Court had ordered lifting the export ban imposed by then chief minister B S Yeddyurappa, with effect from April 20. However, the state government had sought time to put in place the regulatory mechanism and additional infrastructure to monitor the movement of iron ore from the mineheads to ports.
“The unscientific and unsustainable extraction of iron ore has caused serious concerns for the existing and upcoming steel plants in the state”, the report said. The Lok Ayukta has also recommended that per year production for all leases with a life of 15-20 years, shall be brought down to a quarter of the present production. While the per year production for leases having a life of 10-15 years shall be brought down to a fifth of the present production, the same for those having a life of 1-10 years shall be brought down to a tenth, it says.
Basant Poddar, managing director, Mineral Enterprises Limited, said, “It is beyond the jurisdiction of the Lok Ayukta to recommend permanent closure of exports. This subject is to be decided by Parliament and not the Lok Ayukta or any state government. In this age of free trade and India having complied with the World Trade Organisation norms, it is not appropriate to ban iron ore exports.”
Disagreeing with the Lok Ayukta’s comment that reserves with 60 grade ferrous content would not last more than 20 years in the Bellary, Hospet and Sandur (BHS) region, Poddar said the Indian Bureau of Mines (IBM) had estimated the reserves to last for at least 150 years. “The production, including illegal extraction, has gone up manifold. There were debates for and against the reserve available in the BHS zone at various forums. Taking all factors, including the inspection of leases and discussion with mining experts, into consideration, it has been thought to bring this matter in the report for immediate action,” U V Singh said in his report to Lok Ayukta.
The upper limit of dispatch in the BHS region shall not exceed 25 million tonnes a year, including low-grade reserves. The quantification of low-grade or high-grade reserves shall not be left to consultants and lessees. The IBM and state mines department should do this, the Lok Ayukta said in its recommendation.