Karnataka iron ore mining | Why has the Supreme Court relaxed a decade-old ban?

Source: The post is based on the article “Karnataka iron ore mining | Why has the Supreme Court relaxed a decade-old ban?” published in The Hindu on 2nd  September 2022.

What is the News?

The Supreme Court has relaxed the iron ore mining limit for Bellary, Chitradurga and Tumkur districts in Karnataka stating that conservation of the ecology and the environment must go hand in hand with the spirit of economic development.

Background of Iron ore Mining in Karnataka

In 2011, the Supreme Court stopped mining operations in Karnataka. Furthermore, it also banned the export of iron ore pellets from Karnataka with the aim to prevent environmental degradation.

Following the ban, the Supreme Court directed the Indian Council of Forestry Research and Education (ICFRE) to draw up a reclamation and rehabilitation plan to reverse the environmental damage caused by illegal mining.

However, in 2012, the SC allowed 18 “category A” mines to resume operations. Mines were categorized into A, B and C depending on the extent of illegalities committed by them. A category mines are leases wherein no illegality/marginal illegality has been found.

Once the mines were allowed to restart, the ore was sold through e-auctions.

How does e-auction work?

An e-auction is considered a transparent, tamper-proof process in which, after the completion of every bid, a three-member monitoring committee publishes a document. The document lists the details of the quality of iron ore, the mine that it belongs to, the number of bidders for it and the final takers. The monitoring committee is appointed by the SC.

What was the problem with this e-auction?

Mining companies had asked the SC to scrap e-auction norms in the export or sale of iron ore for mining lessees in the districts of Ballari, Tumakuru and Chitradurga.

The mining firms claimed that they were facing closure due to their stocks not getting sold as steel plants and other related industries were not willing to purchase in the e-auction or above the prevailing market price. 

What did the Supreme Court rule?

The Supreme Court permitted the resumption of exports of already excavated iron ore from the state through modes other than e-auction and also increased the ceiling limit on mining.

The court relaxed its 2011 order since the situation had now “changed for the better”.