SC panel backs continuation of e-auction system for sale of iron ore in K'nataka

Central Empowered Committee has recommended for E-auction system until iron ore production reaches at least 25 million tonnes per annum

The E-auction system to sell iron ore to the steel mills is set to continue for close to two more years in Karnataka. The Supreme Court appointed Central Empowered Committee (CEC) has recommended for continuation of the E-auction system until the production of key steel-making raw material reaches the 25 million tonne per annum level. 

According to the Supreme Court dated April 13, 2012, the E-auction system was to end on April 12, 2014. 

Presently, the production is around 19-20 million tonnes per annum and it might touch the 25 million tonne per annum level only in 2015-16 as a large number of mines are yet to secure statutory approvals before restarting mining operations. 

The CEC, in a report submitted to the Apex Court on April 17, has also recommended for continuation of the Monitoring Committee to supervise the E-auctions in a fair manner. 

The green bench of the Supreme Court is set to resume hearing in the matter on April 21, 2014. 

The Supreme Court had constituted the Monitoring Committee comprising Dipak Sarmah, the then additional principal chief conservator of forests, U V Singh, the then chief conservator of forests, and H R Srinivas, the then director, mines and geology department for dealing with the various issues related to the sale through e-auction of the existing stock of iron ore, transportation, account of the sale proceeds of iron ore and related issues. 

The Court, in its order dated April 13, 2012, directed that the sale of the iron ore should continue to be through e-auction and the same should be conducted by the Monitoring Committee constituted by the court. 

The responsibility of the monitoring committee was to monitor the implementation of the various provisions / prescriptions of the R&R Plans. It was also responsible to ensure strict compliance of the conditions on which the environment clearance, the approval under the Forest (Conservation) Act, 1980 and the other statutory approvals have been accorded and ensure mining is undertaking as per the approved Mining Plan. 

It was also entrusted with the task of ensuring that the ceiling on annual production (30 MTPA for all leases) fixed for the lease does not exceed and ensure the safety zone is maintained around the lease area. 

The court had fixed a two year term for the committee, which expired on April 12, 2014. The Apex Court, in its order dated April 18, 2014, had reiterated its April 13, 2012 order. Subsequently, the Court in its order dated November 11, 2013, directed that Shankar Narayanan, presently director, mines and geology, government of Karnataka will be the member of the monitoring committee. 

The CEC is of the opinion that the additional principal chief conservator of forests, government of Karnataka and the Secretary, mines and geology department may be made members of the Monitoring Committee. The director, mines and geology department may continue as its member. Each of the other three present members of the Monitoring Committee may continue to be its members for a period of another three months and during which period they will deal with the preparation and audit of the Accounts of the Monitoring Committee including the amounts held for transfer to the SPV (special purpose vehicle). 

"The present system of sale of the iron ore and manganese through E-auction by the Monitoring Committee may be continued and the same may be reviewed after the production crosses 25 million tonnes per annum," the CEC said. 

As per the Accounts (unaudited) of the Monitoring Committee for the year ended March 31, 2014, the Monitoring Committee has till March 31, 2014 sold about 69.32 million tonnes of mineral for a total sale value of Rs 15,843 crore. About Rs 4,025 crore have realised towards royalty, Rs 1,544 crore towards forest development tax, Rs 802 crore of commercial tax and PWD Toll tax of Rs 141 crore.