Apex court suspends licences of 19 iron ore mines in Karnataka; 68 others await a decision.
Coming down hard on illegal mining, the Supreme Court on Friday suspended licences of 19 iron ore mining companies in Karnataka’s Bellary district.
A forest bench headed by Chief Justice S H Kapadia also barred these companies from transporting the ore till further orders.
The order was passed after taking into account two of the four interim reports of the Central Empowered Committee (CEC) — appointed by the court to look into violations of mining laws by the companies. The reports said “massive illegal mining was conducted in the forest area in connivance with officials and public representatives.”
The companies are: S B Minerals, Trident Minerals, Veeyam Pvt Ltd, Muneer Minerals, VSL Mining Co., D Ramesh, Shiva Vilas Trust, Ramarao Pol, Adarsh Enterprises, J M Vrushabhendraiah (two licenses), Jai Santhoshi Mata Mining Enterprises, Sparkline Mining Corp, Kartikeshwara Mining and Iron Ore Co Pvt Ltd, A Arogyadas, G Praveenkumar Nikkam, Matra Mineral Enterprises and Dalmia Mines, among others.
However, the court order will not have any major impact on the steel industry as 15 of these 19 companies have not been operating for the last one year.
| MINING FACTS # Karnataka has iron ore reserves of 8,277.5 million tonnes, 16.5 per cent of the country’s reserves # The huge resource base of magnetite ore is in the Western Ghats, where mining is banned # Most iron ore mining happens in Bellary, Chitradurga and Tumkur districts # The state has granted 166 mining leases # It produces around 40 million tonnes, of which 70 per cent is in the form of fines, while 30 per cent are lumps. This is about one-fifth of India’s production. # Karnataka exports about 30 million tonnes, one-third of the national figure # At an average price of Rs 4,500 per tonne, the state earns Rs 1.5 lakh crore from iron ore exports in a year # Karnataka imposed a ban on iron ore exports in July 2010. During the first four months of the last financial year, exports amounted to 7.41 million tonnes |
These companies hold mining licences for about 444 acres and account for production of about two million tonnes iron ore per annum. Karnataka produces about 40 million tonnes iron ore in a year, of which 30 million tonnes is exported. Iron ore exports from the state have been banned since July 26, 2010.
The only major steel producer in Karnataka is JSW Steel, which sources iron ore from Mysore Minerals Limited and NMDC. Hence, there would not be any major impact on the steel companies, said industry sources.
“It is difficult to estimate the iron ore supplied by these companies to the domestic steel mills as they are tertiary suppliers. They used to export a part of production while a part was supplied to the local steel mills,” an industry source told Business Standard.
The Karnataka government, in reply to CEC, admitted to export of 30 million tonnes iron ore illegally over the past seven years. Despite the export ban, the state’s royalty revenue from iron ore mining rose 36 per cent to Rs 435 crore in 2010-11.
The Supreme Court is yet to issue an order in the case of 68 other companies. About half of them have already been barred from mining in interim orders passed by the Karnataka High Court. Some have filed review petitions while others have appealed in the Supreme Court. The state government is trying to transfer the former cases to the Supreme Court, which will consider the issue next Friday if a transfer petition is filed.
The state government has supported the findings of CEC. Both CEC and the state’s Lokayukta have found rampant illegal mining in several parts of the state.
The state government had earlier banned iron ore exports. This has been another cause of litigation in the Supreme Court. The government has now put in place new regulations for transport and export of iron ore. The court has lifted the export ban on the basis of these regulations.
The Supreme Court had in February asked CEC to conduct a probe into the allegations of illegal mining in the state and submit a report within six weeks.
The court’s order came on a petition filed by Samaj Parivartan Samudaya, a Dharwad-based non-government organisation, which quoted the Lokayukta report.
The NGO alleged the governments of Karnataka and Andhra Pradesh failed to stop illegal mining of iron ore, which adversely affected the livelihood of the locals, especially the rural poor. It alleged that illegal mining had resulted in “an encroachment of 1,114.8 hectares of forest land in Karnataka.”
Among the 19 companies, Dalmia Mines has been taken over by Hospet-based MSPL Ltd. But it is yet to get a forest clearance from the government for mining.
However, four companies – S B Minerals, Trident Minerals, Veeyam Pvt Ltd and Muneer Minerals -- allegedly extracted four million tonnes iron ore from Dalmia Mines over one-and-a-half years. This was illegal as the lease area fell in a forest, said industry sources.
