SC allows iron ore auction

The Supreme Court on Friday allowed the auction of 25 million tonnes iron ore that was excavated from the Karnataka mines earlier to ensure that steel mills can operate smoothly till a final decision is taken on environmental issues.

Every month, 1.5 million tonnes of iron ore will be auctioned. The court said it will review the order after three months and mining will be linked to rehabilitation and reclamation of land.

A section of medium industries expressed their fear that they will not be able to compete with the big industries in the auctions. Some other entities, which have captive mines, did not get any reprieve either, but the court clarified that individual cases will be taken up later.

The bench headed by Chief Justice S H Kapadia accepted the recommendations of the central empowered committee set up by the court with some modifications. The Chief Justice emphasised that on Friday’s order was meant to alleviate the current crisis in the steel industry due to the alleged shortage of ore following the recent ban. The court had earlier suspended mining in Bellary, Tumkur and Chitradurga districts.

The Chief Justice insisted all industries involved in mining and manufacturing must sit together or form an association to reclaim the land devastated by mining for all these years. They should present a scheme before the court so that an environmentally sustainable scheme could be chalked out. The industries cannot exhaust all natural resources in a short period forgetting inter-generational equity, the judges observed.

In the future, operations can be resumed only after following environmental considerations. He said the conditions imposed now would not be relaxed till a rehabilitation plan was worked out by the industries. He also insisted that all parties should contribute to a common fund for reclamation of the excavated land.

Regarding the auction, the court said there should be proper invoicing. Even NMDC has been enjoying under-pricing for years. It is better to pay the right price now, the court observed. The court further clarified that exports will not be allowed, which has already been prohibited and there would be no intermediaries.

Prashant Bhushan, counsel for a local association challenging illegal mining, submitted that there was surplus iron ore in India and it is even being exported.

However, if reckless mining goes unchecked, the resources will be exhausted within a few years. This will affect furture generations, he argued. The case will be taken up on September 16.